[Title 7 CFR ]
[Code of Federal Regulations (annual edition) - January 1, 2005 Edition]
[From the U.S. Government Printing Office]
[[Page i]]
7
Parts 400 to 699
Revised as of January 1, 2005
Agriculture
________________________
Containing a codification of documents of general
applicability and future effect
As of January 1, 2005
With Ancillaries
Published by
Office of the Federal Register
National Archives and Records
Administration
A Special Edition of the Federal Register
[[Page ii]]
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[[Page iii]]
Table of Contents
Page
Explanation................................................. v
Title 7:
Subtitle B--Regulations of the Department of Agriculture
(Continued)
Chapter IV--Federal Crop Insurance Corporation,
Department of Agriculture 5
Chapter V--Agricultural Research Service, Department
of Agriculture 347
Chapter VI--Natural Resources Conservation Service,
Department of Agriculture 365
Finding Aids:
Table of CFR Titles and Chapters........................ 515
Alphabetical List of Agencies Appearing in the CFR...... 533
List of CFR Sections Affected........................... 543
[[Page iv]]
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Cite this Code: CFR
To cite the regulations in
this volume use title,
part and section number.
Thus, 7 CFR 400.27 refers
to title 7, part 400,
section 1.
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[[Page v]]
EXPLANATION
The Code of Federal Regulations is a codification of the general and
permanent rules published in the Federal Register by the Executive
departments and agencies of the Federal Government. The Code is divided
into 50 titles which represent broad areas subject to Federal
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name of the issuing agency. Each chapter is further subdivided into
parts covering specific regulatory areas.
Each volume of the Code is revised at least once each calendar year
and issued on a quarterly basis approximately as follows:
Title 1 through Title 16.................................as of January 1
Title 17 through Title 27..................................as of April 1
Title 28 through Title 41...................................as of July 1
Title 42 through Title 50................................as of October 1
The appropriate revision date is printed on the cover of each
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OMB CONTROL NUMBERS
The Paperwork Reduction Act of 1980 (Pub. L. 96-511) requires
Federal agencies to display an OMB control number with their information
collection request.
[[Page vi]]
Many agencies have begun publishing numerous OMB control numbers as
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[[Page vii]]
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Raymond A. Mosley,
Director,
Office of the Federal Register.
January 1, 2005.
[[Page ix]]
THIS TITLE
Title 7--Agriculture is composed of fifteen volumes. The parts in
these volumes are arranged in the following order: parts 1-26, 27-52,
53-209, 210-299, 300-399, 400-699, 700-899, 900-999, 1000-1199, 1200-
1599, 1600-1899, 1900-1939, 1940-1949, 1950-1999, and part 2000 to end.
The contents of these volumes represent all current regulations codified
under this title of the CFR as of January 1, 2005.
The Food and Nutrition Service current regulations in the volume
containing parts 210-299, include the Child Nutrition Programs and the
Food Stamp Program. The regulations of the Federal Crop Insurance
Corporation are found in the volume containing parts 400-699.
All marketing agreements and orders for fruits, vegetables and nuts
appear in the one volume containing parts 900-999. All marketing
agreements and orders for milk appear in the volume containing parts
1000-1199. Part 900--General Regulations is carried as a note in the
volume containing parts 1000-1199, as a convenience to the user.
For this volume, Robert J. Sheehan was Chief Editor. The Code of
Federal Regulations publication program is under the direction of
Frances D. McDonald, assisted by Alomha S. Morris.
[[Page 1]]
TITLE 7--AGRICULTURE
(This book contains parts 400 to 699)
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Part
SUBTITLE B--Regulations of the Department of Agriculture (Continued)
chapter iv--Federal Crop Insurance Corporation, Department
of Agriculture............................................ 400
chapter v--Agricultural Research Service, Department of
Agriculture............................................... 500
chapter vi--Natural Resources Conservation Service,
Department of Agriculture................................. 600
[[Page 3]]
Subtitle B--Regulations of the Department of Agriculture (Continued)
[[Page 5]]
CHAPTER IV--FEDERAL CROP INSURANCE CORPORATION, DEPARTMENT OF
AGRICULTURE
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Part Page
400 General administrative regulations.......... 7
401 [Reserved]
402 Catastrophic Risk Protection Endorsement.... 67
403-406 [Reserved]
407 Group risk plan of insurance regulations for
the 2005 and succeeding crop years...... 72
408-411 [Reserved]
412 Public information--Freedom of information.. 96
413-456 [Reserved]
457 Common crop insurance regulations........... 97
458 [Reserved]
[[Page 7]]
PART 400_GENERAL ADMINISTRATIVE REGULATIONS--Table of Contents
Subparts A-B [Reserved]
Subpart C_General Administrative Regulations; Mutual Consent
Cancellation
Sec.
400.27 Applicability.
400.28 Mutual consent criteria.
400.29-400.36 [Reserved]
Subparts D-E [Reserved]
Subpart F_Food Security Act of 1985, Implementation; Denial of Benefits
400.45 Applicability.
400.46 Definitions.
400.47 Denial of crop insurance.
400.48 Protection of interests of tenants, landlords or producers.
400.49-400.50 [Reserved]
Subpart G_Actual Production History
400.51 Availability of actual production history program.
400.52 Definitions.
400.53 Yield certification and acceptability.
400.54 Submission and accuracy of production reports.
400.55 Qualifications for actual production history coverage program.
400.56 Administrative appeal exhaustion.
400.57 [Reserved]
Subpart H_Information Collection Requirements Under the Paperwork
Reduction Act; OMB Control Numbers
400.65-400.66 [Reserved]
Subpart I [Reserved]
Subpart J_Appeal Procedure
400.90 Definitions.
400.91 Applicability.
400.92 Appeals.
400.93 Administrative review.
400.94 Mediation.
400.95 Time limitations for filing and responding to requests for
administrative review.
400.96 Judicial review.
400.97 Reservations of authority.
400.98 Reconsideration process.
Subpart K_Debt Management_Regulations for the 1986 and Succeeding Crop
Years
400.115 Purpose.
400.116 Definitions.
400.117 Determination of delinquency.
400.118 Demand for payment.
400.119 Notice to debtor; credit reporting agency.
400.120 Subsequent disclosure and verification.
400.121 Information disclosure limitations.
400.122 Attempts to locate debtor.
400.123 Request for review of the indebtedness.
400.124 Disclosure to credit reporting agencies.
400.125 Notice to debtor, collection agency.
400.126 Referral of delinquent debts to contract collection agencies.
400.127 [Reserved]
400.128 Definitions.
400.129 Salary offset.
400.130 Notice requirements before offset.
400.131 Request for a hearing and result if an employee fails to meet
deadlines.
400.132 Hearings.
400.133 Written decision following a hearing.
400.134 Review of FCIC record related to the debt.
400.135 Written agreement to repay debt as an alternative to salary
offset.
400.136 Procedures for salary offset; when deductions may begin.
400.137 Procedures for salary offset; types of collection.
400.138 Procedures for salary offset; methods of collection.
400.139 Nonwaiver of rights.
400.140 Refunds.
400.141 Internal Revenue Service (IRS) Tax Refund Offset.
400.142 Past-due legally enforceable debt eligible for refund offset.
Subpart L_Reinsurance Agreement_Standards for Approval; Regulations for
the 1997 and Subsequent Reinsurance Years
400.161 Definitions.
400.162 Qualification ratios.
400.163 Applicability.
400.164 Availability of the Standard Reinsurance Agreement.
400.165 Eligibility for Standard Reinsurance Agreements.
400.166 Obligations of the Corporation.
400.167 Limitations on Corporation's obligations.
400.168 Obligations of participating insurance company.
400.169 Disputes.
400.170 General qualifications.
400.171 Qualifying when a state does not require that an Annual
Statutory Financial Statement be filed.
400.172 Qualifying with less than two of the required ratios or ten of
the analytical ratios meeting the specified requirements.
400.173 [Reserved]
[[Page 8]]
400.174 Notification of deviation from financial standards.
400.175 Revocation and non-acceptance.
400.176 State action preemptions.
400.177 [Reserved]
Subpart M_Agency Sales and Service Contract_Standards for Approval
400.201 Applicability of standards.
400.202 Definitions.
400.203 Financial statement and certification.
400.204 Notification of deviation from standards.
400.205 Denial or termination of contract and administrative
reassignment of business.
400.206 Financial qualifications for acceptability.
400.207 Representative licensing and certification.
400.208 Term of the contract.
400.209 Electronic transmission and receiving system.
400.210 [Reserved].
Subpart N [Reserved]
Subpart O_Non-Standard Underwriting Classification System Regulations
for the 1991 and Succeeding Crop Years
400.301 Basic, purpose, and applicability.
400.302 Definitions.
400.303 Initial selection criteria.
400.304 Nonstandard Classification determinations.
400.305 Assignment of Nonstandard Classifications.
400.306 Spouses and minor children.
400.307 Discontinuance of participation.
400.308 Notice of Nonstandard Classification.
400.309 Requests for reconsideration.
Subpart P_Preemption of State Laws and Regulations
400.351 Basis and applicability.
400.352 State and local laws and regulations preempted.
Subpart Q_General Administrative Regulations; Collection and Storage of
Social Security Account Numbers and Employer Identification Numbers
400.401 Basis and purpose and applicability.
400.402 Definitions.
400.403 Required system of records.
400.404 Policyholder responsibilities.
400.405 Agent and loss adjuster responsibilities.
400.406 Insurance provider responsibilities.
400.407 Restricted access.
400.408 Safeguards and storage.
400.409 Unauthorized disclosure.
400.410 Penalties.
400.411 Obtaining personal records.
400.412 Record retention.
400.413 [Reserved]
Subpart R_Sanctions
400.451 General.
400.452 Definitions.
400.453 Exhaustion of administrative remedies.
400.454 Civil penalties.
400.455 Governmentwide debarment and suspension (procurement).
400.456 Governmentwide debarment and suspension (nonprocurement).
400.457 Program Fraud Civil Remedies Act.
400.458 Scheme or device.
400.459 Indebtedness.
400.460-400.500 [Reserved]
Subpart S [Reserved]
Subpart T_Federal Crop Insurance Reform, Insurance Implementation
400.650 Purpose.
400.651 Definitions.
400.652 Insurance availability.
400.653 Determining crops of economic significance.
400.654 Application and acreage report.
400.655 Eligibility for other program benefits.
400.656-400.657 [Reserved]
Subpart U_Ineligibility for Programs Under the Federal Crop Insurance
Act
400.675 Purpose.
400.676 [Reserved]
400.677 Definitions.
400.678 Applicability.
400.679 Criteria for ineligibility.
400.680 Determination and notification of ineligibility.
400.681 Effect of ineligibility.
400.682 Criteria for reinstatement of eligibility.
400.683 Administration and maintenance.
Subpart V_Submission of Policies, Provisions of Policies and Rates of
Premium
400.700 Basis, purpose, and applicability.
400.701 Definitions.
400.702 Confidentiality of submission and duration of confidentiality.
400.703 Timing of submission.
400.704 Type of submission.
400.705 Contents required for a new submission or changes to a
previously approved submission.
400.706 Review of submission.
400.707 Presentation to the Board for approval or disapproval.
[[Page 9]]
400.708 Approved submission.
400.709 Roles and responsibilities.
400.710 Preemption and premium taxation.
400.711 Right of review, modification, and the withdrawal of
reinsurance.
400.712 Research and development reimbursement, maintenance
reimbursement, and user fees.
400.713 Non-reinsured supplemental (NRS) policy.
Subpart W [Reserved]
Subpart X_Interpretations of Statutory and Regulatory Provisions
400.765 Basis and applicability.
400.766 Definitions.
400.767 Requester obligations.
400.768 FCIC obligations.
Subparts A-B [Reserved]
Subpart C_General Administrative Regulations; Mutual Consent
Cancellation
Authority: 7 U.S.C. 1501 et seq.
Source: 57 FR 56438, Nov. 30, 1992, unless otherwise noted.
Sec. 400.27 Applicability.
Notwithstanding any provisions of the crop insurance policy to the
contrary, the mutual consent provision contained herein shall be
applicable to all new crop insurance policies issued by the Federal Crop
Insurance Corporation (7 CFR part 401 et seq.), or by a company
reinsured by the Federal Crop Insurance Corporation, effective for the
applicable crop year only if those policies meet the requirements of
Sec. 400.28 of this subpart and if the crop insured is the same as the
crop for which a disaster payment application (CCC 441) was filed for
the previous crop year.
[58 FR 67304, Dec. 21, 1993]
Sec. 400.28 Mutual consent criteria.
(a) An insured may request policy cancellation for the crop year for
which the insured filed a CCC 441 for the applicable crop year if
written documentation is provided, signed by an authorized Agricultural
Stabilization and Conservation Service official, certifying the
cancellation is based on one of the following conditions:
(1) Insurance was not a condition of eligibility for disaster
payment, based on one or more of the statutory criteria; or
(2) the producer withdrew his application for disaster payments with
prejudice or it was rejected by Commodity Credit Corporation;
(b) Cancellation requests must be received in writing no later than
three weeks after the date:
(1) The disaster payment check is issued; or
(2) The producer is notified that an application for disaster
payment has been rejected; or
(3) The producer withdraws from the disaster payment program.
(c) Carryover policies are not available for mutual consent
cancellation. Crop insurance applications dated before the disaster
cancellation date (available in the insureds' service office) are not
eligible for mutual consent cancellations.
[57 FR 56438, Nov. 30, 1992, as amended at 58 FR 67304, Dec. 21, 1993]
Sec. Sec. 400.29-400.36 [Reserved]
Subparts D-E [Reserved]
Subpart F_Food Security Act of 1985, Implementation; Denial of
Benefits
Authority: Secs. 1506, 1516, Pub. L. 75-430, 52 Stat. 73, 77, as
amended (7 U.S.C. 1501 et seq.); sec. 1244, Pub. L. 99-198.
Source: 52 FR 19128, May 21, 1987, unless otherwise noted.
Sec. 400.45 Applicability.
(a) The regulations in this subpart implement Chapter XII and
section 1764 of the Food Security Act of 1985 (Pub. L. 99-198) (the Act)
requiring the denial of crop insurance to persons who are determined to
have performed certain practices prohibited by the Act or who have
violated certain federal or State statutes or the regulations
implementing the Act. The provisions of this subpart are applicable to
all crop insurance policies written by the Federal Crop Insurance
Corporation (the Corporation) or reinsured by the Corporation.
[[Page 10]]
(b) The provisions of this subpart will be effective for the crop
and crop year immediately following the first crop cancellation date
occurring after the effective date of the Act for all crop policies
reinsured by FCIC, and for all policies and regulations for crop
insurance issued by FCIC.
Sec. 400.46 Definitions.
For the purpose of this regulation and in addition to the
definitions included at 7 CFR 12.2, the following definitions are
applicable:
(a) Controlled substance means any prohibited drug-producing plants
including, but not limited to, cacti of the genus lophophora, coca
bushes (erythroxylum coca), marijuana (cannabis satiua), opium poppies
(papauer somniferum), and other drug-producing plants, the planting and
harvesting of which is prohibited by Federal or State law.
(b) Person means any producer, tenant, or landlord, insured under a
policy of crop insurance issued by FCIC, or by a multi-peril insurance
company whose crop insurance policy is reinsured by FCIC.
(c) State means each of the fifty States, the District of Columbia,
the Commonwealth of Puerto Rico, Guam, the Virgin Islands of the United
States, American Samoa, the Commonwealth of the Northern Mariana
Islands, or the Trust Territory of the Pacific.
(d) The Act means the Food Security Act of 1985 (Pub. L. 99-198).
Sec. 400.47 Denial of crop insurance.
(a) Any person convicted under Federal or State law of planting,
cultivating, growing, producing, harvesting or storing a controlled
substance in any crop year will be ineligible for crop insurance during
that crop year and the four succeeding crop years.
(1) The insurance of such person insured by FCIC who found to be
ineligible under paragraph (a) of this section will be null and void,
and any indemnity paid on such insurance must be returned in full to
FCIC. Any premium paid for insurance coverage declared null and void
will be returned, less a reasonable amount for expenses and handling not
to exceed 20 percent of the premium paid.
(2) The application and policy of insurance will be voided, or the
person will be removed from the policy and the policyholder share
reduced in accordance with 7 CFR 400.681(b), when any person becomes
ineligible for crop insurance under the provisions of paragraph (a) of
this section. To obtain crop insurance coverage following the period of
ineligibility, the person must submit a new application for crop
insurance.
(b) Any insurance written by a multi-peril crop insurance company to
any person who is ineligible under the provisions of this subpart is not
eligible for reinsurance under the Corporation's standard reinsurance
agreement. Any premium subsidy and expense allowance or loss paid by the
Corporation because of such agreement will be immediately refunded to
the Corporation. Notwithstanding any other provision of law, policies
written by multi-peril crop insurance companies to any person ineligible
under the provisions of this subpart are null and void. Premium paid for
such policies will be refunded to the person applying for insurance,
less a reasonable amount for expenses and handling not to exceed 20
percent of the premium paid, and no indemnity will be paid unless the
multi-peril company expressly agrees to continue such policy in effect
without FCIC reinsurance. However, if the reinsured company follows the
procedure of the Corporation and the requirements of the regulations,
reinsurance will continue to be provided under the reinsurance agreement
on the policy unless it is shown that the agent or company had knowledge
of facts which would indicate ineligibility on the part of the insured
and failed to act on that knowledge.
(c) FCIC employees or contractors are required to report all
suspected cases of violation of the Act or the regulations to the
appropriate agency for a determination of violation. Benefits shall not
be paid in such cases pending a determination from the appropriate
agency.
(d) Notwithstanding any other provision of this subpart, any crop
insurance policy where insurance attached to a crop prior to August 15,
1986, will continue in effect for that crop until the
[[Page 11]]
next termination date following August 15, 1986.
[52 FR 19128, May 21, 1987, as amended at 58 FR 17945, Apr. 7, 1993; 61
FR 38058, July 23, 1996; 65 FR 29942, May 10, 2000]
Sec. 400.48 Protection of interests of tenants, landlords or
producers.
Any tenant, landlord or producer on the farm separate from the
person declared ineligible for crop insurance under the provisions of
Sec. 400.47 of this part, will remain eligible for crop insurance on
their insurable share in the crop, unless such tenant, landlord, or
producer on the farm is:
(a) Also convicted of planting, cultivating, growing, producing, or
storing a controlled substance;
(b) Otherwise determined by FCIC to be ineligible for crop
insurance.
[52 FR 19128, May 21, 1987, as amended at 61 FR 38058, July 23, 1996]
Sec. Sec. 400.49-400.50 [Reserved]
Subpart G_Actual Production History
Authority: 7 U.S.C. 1506, 1516.
Source: 59 FR 47787, Sept. 19, 1994, unless otherwise noted.
Sec. 400.51 Availability of actual production history program.
An Actual Production History (APH) Coverage Program is offered under
the provisions contained in the following regulations:
7 CFR part 457--Common Crop Insurance Regulations; and all special
provisions thereto unless specifically excluded by the special
provisions.
The APH program operates within limits prescribed by, and in
accordance with, the provisions of the Federal Crop Insurance Act, as
amended (7 U.S.C. 1501 et seq.), only on those crops identified in this
section in those areas where the Actuarial Table provides coverage.
Except when in conflict with this subpart, all provisions of the
applicable crop insurance contract for these crops apply.
[59 FR 47787, Sept. 19, 1994, as amended at 69 FR 9520, Mar. 1, 2004]
Sec. 400.52 Definitions.
In addition to the definitions contained in the crop insurance
contract, the following definitions apply for the purposes of the APH
Coverage Program:
(a) APH--Actual Production History.
(b) Actual yield--The yield per acre for a crop year calculated from
the production records or claims for indemnities. The actual yield is
determined by dividing total production (which includes harvested and
appraised production) by planted acres for annual crops or by insurable
acres for perennial crops.
(c) Adjusted yield--The transitional or determined yield reduced by
the applicable percentage for lack of records. The adjusted yield will
equal 65 percent of the transitional or determined yield, if no producer
records are submitted; 80 percent, if records for one year are
submitted; and 90 percent, if two years of records are submitted.
(d) Appraised production--Production determined by the Agricultural
Stabilization and Conservation Service (ASCS), the FCIC, or a company
reinsured by the FCIC, that was unharvested but which reflected the
crop's yield potential at the time of the appraisal. For the purpose of
APH ``appraised production'' specifically excludes production lost due
to uninsurable causes.
(e) Approved APH yield--A yield, calculated and approved by the
verifier, used to determine the production guarantee and determined by
the sum of the yearly actual, assigned, and adjusted or unadjusted
transitional or determined yields divided by the number of yields
contained in the database. The database may contain up to 10 consecutive
crop years of actual and or assigned yields. At least four yields will
always exist in the database.
(f) Assigned yield--A yield assigned by FCIC in accordance with the
crop insurance contract, if the insured does not file production reports
as required by the crop insurance contract. Assigned yields are used in
the same manner as actual yields when calculating APH yields except for
purposes of the Nonstandard Classification System (NCS).
[[Page 12]]
(g) Base period--Ten consecutive crop years (except peaches, which
have a five-year base period) immediately preceding the crop year
defined in the insurance contract for which the approved APH yield is
being established (except for sugarcane, which begins the calendar year
preceding the immediate previous crop year defined in the insurance
contract).
(h) Continuous production reports--Reports submitted by a producer
for each crop year that the unit was planted to the crop and for the
most recent crop year in the base period.
(i) Crop year--Defined in the crop insurance contract, however, for
APH purposes the term does not include any year when the crop was not
planted or when the crop was prevented from being planted by an
insurable cause. For example, if an insured plants acreage in a county
to wheat one year, that year is a crop year in accordance with the
policy definition. If the land is summerfallowed the next calendar year,
that calendar year is not a crop year for the purpose of APH.
(j) Database--A minimum of four years up to a maximum of ten crop
years of production data used to calculate the approved APH yield.
(k) Determined yield (D-yield)--An estimated year for certain crops,
which can be determined by multiplying an average yield for the crop
(attained by using data available from The National Agricultural
Statistics Service (NASS) or comparable sources) by a percentage
established by the FCIC for each county.
(l) Master yields--Approved APH yields, for certain crops and
counties as initially designated by the FCIC, based on a minimum of four
crop years of production records for a crop within a county.
(m) New producer--A person who has not been actively engaged in
farming for a share of the production of the insured crop for more than
two crop years.
(n) Production report--A written record showing the insured crop's
annual production and used to determine the insured's yield for
insurance purposes. The report contains yield history by unit, if
applicable, including planted acreage for annual crops, insurable
acreage for perennial crops, and harvested and appraised production for
the previous crop years. This report must be supported by written
verifiable records, measurement of farm stored production, or by other
records of production approved by FCIC on an individual basis.
Information contained in a claim for indemnity is considered a
production report for the crop year for which the claim was filed.
(o) Production Reporting Date (PRD)--The PRD is contained in the
crop insurance contract and is the last date production reports will be
accepted for inclusion in the database for the current crop year.
(p) Transitional yield (T-Yield)--An estimated yield, for certain
crops, generally determined by multiplying the ASCS program yield by a
percentage determined by the FCIC for each county and provided on the
actuarial table to be used in the APH yield calculation process when
less than four consecutive crop years of actual or assigned yields are
available.
(q) Verifiable records--Contemporaneous records of acreage and
production provided by the insured, which may be verified by FCIC
through an independent source, and which are used to substantiate the
acreage and production that have been reported on the production report.
(r) Verifier--A person authorized by the FCIC to calculate approved
APH yields.
(s) Yield variance tables--Tables for certain crops that indicate
unacceptable yield variations and yield trends which will require
determination of the APH yield by the FCIC.
Sec. 400.53 Yield certification and acceptability.
(a) Production reports must be provided to the crop insurance agent
no later than the production reporting date for the crop insured.
(1) Production reports must provide an accurate account of planted
acreage for annual crops or insurable acres for perennial crops, as well
as harvested and appraised production by unit.
(2) The insured must certify the accuracy of the information.
(3) Production reported for more than one crop year must be
continuous. A
[[Page 13]]
year in which no acreage was planted to the crop on a unit or no acreage
was planted to a practice, type, or variety requiring an APH yield will
not be considered a break in continuity. Assigned yields, at the
discretion of the FCIC, may be used to maintain continuity of yield data
of file. Production on uninsured (for those years a crop insurance
policy under the Federal Crop Insurance Act is in effect) or uninsurable
acreage (for other years of the period) will not be used to determine
APH yield unless production from such acreage is commingled with
production from insured or insurable acreage.
(b) Production reports and supporting records are subject to audit
or review to verify the accuracy of the information certified.
Production and supporting records may be reviewed and verified if a
claim for indemnity is submitted on the insured crop. The reported yield
is subject to revision, if needed, so that the claim conforms to the
records submitted at that time.
(1) Inaccurate production reports or failure to retain acceptable
records shall result in the verifier combining optional farm units and
recomputing the approved APH yield. These actions shall be taken at any
time after reporting or record discrepancies are identified and may
result in reduction of the approved APH yield for any calendar year.
(2) Records must be provided by the insured at the time of an audit,
review, or as otherwise requested, to verify that the acreage and
production certified are accurate. Records of any other person having
shares in the insured crop, which are used by the insured to establish
the approved APH yield, must also be provided upon request.
(3) In the event acreage or production data certified by two or more
persons sharing in the crop on the same acreage is different, the
verifier shall, at the verifier's discretion, determine which acreage
and production data, if any, will be used to determine the approved APH
yield. If the correct acreage and production cannot be determined, the
data submitted will be considered unacceptable by the verifier for APH
purposes.
(4) Failure of the producer to report acreage and production
completely and accurately may result in voidance of the crop insurance
contract, as well as criminal or civil false claims penalties pursuant
to applicable Federal criminal or civil statutes.
Sec. 400.54 Submission and accuracy of production reports.
(a) The insured is solely responsible for the timely submission and
certification of accurate, complete production reports to the agent.
Production reports must be provided for all planted units.
(b) Records may be requested by the FCIC, or an insurance company
reinsured by the FCIC, or by anyone acting on behalf of the FCIC or the
insurance company. The insured must provide such records upon request.
(c) The agent will explain the APH Program to insureds and
prospective insureds. When necessary, the agent will assist the insured
in preparation of production reports. The agent will determine the
adjusted or unadjusted transitional or determined yields in accordance
with Sec. 400.54(b). The agent will review the production reports and
forward them to the verifier, along with any requested and required
supporting records for determination of an approved APH yield.
(d) The verifier will determine if the certified production reports
are acceptable and calculate the approved APH yield.
Sec. 400.55 Qualification for actual production history coverage
program.
(a) The approved APH yield is calculated from a database containing
a minimum of four yields and will be updated each subsequent crop year.
The database may contain a maximum of the 10 most recent crop years and
may include actual, assigned, and adjusted or unadjusted T or D-Yields.
T or D-Yields, adjusted or unadjusted, will only occur in the database
when there are less than four years of actual and/or assigned yields.
(b) The insured may be required to provide production records to
determine the approved APH yield, if production records for the most
recent crop year are available. If acceptable
[[Page 14]]
records of actual production are provided, the records must be
continuous and contain at least the most recent crop year's actual
yield.
(1) If no acceptable production records are available, the approved
APH yield is the adjusted T or D-Yield (65 percent of T or D-Yield).
(2) If acceptable production records containing information for only
the most recent crop year are provided, the three T or D-Yields adjusted
by 80 percent will be used to complete the minimum database and
calculate the approved APH yield.
(3) If acceptable production records containing information for only
the two most recent crop years are provided, the two T or D-Yields
adjusted by 90 percent and the two actual yields will be used to
complete the database and calculate the approved APH yield.
(4) If acceptable production records containing information for only
the three most recent crop years are provided, the three actual yields
and one unadjusted T or D-Yield are used to complete the database and
calculate the approved APH yield.
(5) When the database contains four or more (up to ten) continuous
actual yields, the approved APH yield is a simple average of the actual
yields.
(6) New producers may have their approved APH yields based on
unadjusted T or D-Yields or a combination of actual and unadjusted T or
D-Yields.
(7) Producers who add land or new practice, types and varieties to
their farming operations and who do not have available records for the
added land, practice, types or varieties may have approved APH yields
for the added land, practice, types or varieties that are based on
adjusted or unadjusted T or D-Yields as determined by FCIC.
(8) If the producer's crop is destroyed or if it produces a low
actual yield due to insured causes of loss, the resulting average yield
may qualify for catastrophic yield adjustment according to FCIC
guidelines. APH yields qualifying for catastrophic yield adjustment may
be adjusted to mitigate the effect of catastrophic years. Premium rates
for approved APH yields, which are adjusted for catastrophic years, may
be based on the producer's APH average yield prior to the catastrophic
adjustment or such other basis as determined appropriate by FCIC.
(c) If no insurable acreage of the insured crop is planted for a
year, a production report indicating zero planted acreage will maintain
the continuity of production reports for APH record purposes and that
calendar year will not be included in the APH yield calculations.
(d) Actual yields calculated from the claim for indemnity will be
entered in the database. The resulting average yield will be used to
determine the premium rate and approved APH yield, at the discretion of
FCIC.
(e) Optional units are not available to an insured who does not
provide acceptable production reports for at least the most recent crop
year with which to calculate an approved APH yield.
(f) FCIC may determine approved APH yields for designated crops in
the following situations:
(1) If less than four years of yield history is certified and T or
D-Yields are not provided in the actuarial documents,
(2) If actual yield exceed tolerances specified in yield variance
tables, and
(3) For perennial crops:
(i) If significant upward or downward yield trends are indicated;
(ii) If tree or vine damage, or cultural practices will reduce the
production level;
(iii) if more than two percent of the trees or vines have been
removed within the last two years; or
(iv) If yield trends are evident and yields greater than the average
yield are requested by the insured.
(g) APH yields will not be approved the first insurance year on
perennial crops until an inspection acceptable to FCIC has been
performed and the acreage is accepted for insurance purposes in
accordance with the crop insurance contract.
(h) APH Master Yields may be established whenever crop rotation
requirements and land leasing practices limit the yield history
available. FCIC will establish crops and locations for which Master
Yields are available. To qualify, the producer must have at least four
recent continuous crop years' annual production reports and must certify
[[Page 15]]
the authenticity of the production reports of the insured crop. Master
Yields are based on acreage and production history from all acreage of
the insured crop in the county in which the operator has shared in the
crop's production.
(i) FCIC may use any production report available under the
provisions of any crop insurance contract, whether continuous or not,
involving the interests of the person's insured crops in determining the
approved APH yield.
Sec. 400.56 Administrative appeal exhaustion.
The insured may appeal the approved APH yield in accordance with the
procedures contained in 7 CFR part 400, subpart J. Administrative
remedies through the appeal process must be exhausted prior to any
action for judicial review. The approved APH yield determined as a
result of the appeal process will be the yield applicable to the crop
year.
Sec. 400.57 [Reserved]
Subpart H_Information Collection Requirements Under the Paperwork
Reduction Act; OMB Control Numbers
Authority: 5 U.S.C. 1320, Pub. L. 96-511 (44 U.S.C., chapter 35).
Source: 56 FR 49390, Sept. 30, 1991, unless otherwise noted.
Sec. 400.65-400.66 [Reserved]
Subpart I [Reserved]
Subpart J_Appeal Procedure
Authority: 7 U.S.C. 1506(l), 1506(p)
Source: 67 FR 13251, Mar. 22, 2002, unless otherwise noted.
Sec. 400.90 Definitions.
Act. The Federal Crop Insurance Act (7 U.S.C. 1501-1524).
Administrative review. A review within the Department of Agriculture
of an adverse decision.
Adverse decision. A decision by an employee or Director of the
Agency that is adverse to the participant. The term includes the denial
of program benefits, written agreements, eligibility, etc. that results
in the participant receiving less funds than the participant believes
should have been paid or not receiving a benefit to which the
participant believes he or she was entitled.
Agency. RMA or FCIC, including the RSO, FOSD or any other division
within the Agency with decision making authority.
Appellant. Any participant who appeals or requests mediation of an
adverse decision of the Agency in accordance with this subpart. Unless
otherwise specified in this subpart, the term ``appellant'' includes an
authorized representative.
Authorized representative. Any person, whether or not an attorney,
who has obtained a Privacy Act waiver and is authorized in writing by a
participant to act for the participant in the administrative review,
mediation, or appeal process.
Certified State. A State with a mediation program, approved by the
Secretary, that meets the requirements of 7 CFR part 1946, subpart A, or
a successor regulation.
FCIC. The Federal Crop Insurance Corporation, a wholly owned
Government corporation within USDA.
FOSD. The Fiscal Operations and Systems Division established by the
Agency for the purpose of making determinations of indebtedness for
policies insured by FCIC and for determining ineligibility for policies
both insured and reinsured by FCIC.
FSA. The Farm Service Agency, an agency within USDA, or its
successor agency.
Good farming practices. For agricultural commodities insured under
the terms contained in 7 CFR part 457 and all other crop insurance
policies authorized under the Act, except as provided herein, means the
good farming practices as defined at 7 CFR 457.8. For agricultural
commodities insured under the terms contained in 7 CFR part 407, means
the good farming practices as defined at 7 CFR 407.9.
Insured. An individual or entity that has applied for crop insurance
or who holds a crop insurance policy that was in effect for the previous
crop year and
[[Page 16]]
continues to be in effect for the current crop year.
Mediation. A process in which a trained, impartial, neutral third
party (the mediator), meets with the disputing parties, facilitates
discussions, and works with the parties to mutually resolve their
disputes, narrow areas of disagreement, and improve communication.
NAD. The USDA National Appeals Division. See 7 CFR part 11.
Non-certified State. A State that is not approved by the Secretary
of Agriculture to participate in the USDA Mediation Program under 7 CFR
part 1946, subpart A, or its successor regulation.
Participant. An individual or entity that has applied for crop
insurance or who holds a valid crop insurance policy that was in effect
for the previous crop year and continues to be in effect for the current
crop year. The term does not include individuals or entities whose
claims arise under the programs excluded in the definition of
participant published at 7 CFR 11.1.
Reinsured company. A private insurance company, including its
agents, that has been approved and reinsured by FCIC to provide
insurance to participants.
Reviewing authority. A person assigned the responsibility by the
Agency of making a decision on a request for administrative review by
the participant in accordance with this subpart.
RMA. The Risk Management Agency, an agency within USDA, or its
successor agency.
RSO. The Regional Service Office established by the Agency for the
purpose of providing program and underwriting services for private
insurance companies reinsured by FCIC under the Act and for FCIC
insurance contracts delivered through FSA offices.
Secretary. The Secretary of Agriculture.
USDA. United States Department of Agriculture.
[67 FR 13251, Mar. 22, 2002, as amended at 68 FR 37720, June 25, 2003]
Sec. 400.91 Applicability.
(a) This subpart applies to:
(1) Adverse decisions made by personnel of the Agency with respect
to:
(i) Contracts of insurance insured by FCIC; and
(ii) Contracts of insurance of private insurance companies and
reinsured by FCIC under the provisions of the Act.
(2) Determinations of good farming practices made by personnel of
the Agency or the reinsured company (see Sec. 400.98).
(b) This subpart is not applicable to any decision:
(1) Made by the Agency with respect to any matter arising under the
terms of the Standard Reinsurance Agreement with the reinsured company;
or
(2) Made by any private insurance company with respect to any
contract of insurance issued to any producer by the private insurance
company and reinsured by FCIC under the provisions of the Act, except
for determinations of good farming practices specified in Sec.
400.91(a)(2).
(c) With respect to matters identified in Sec. 400.91(a)(1),
participants may request an administrative review, mediation, or appeal
of adverse decisions by the Agency made with respect to:
(1) Denial of participation in the crop insurance program;
(2) Compliance with terms and conditions of insurance;
(3) Issuance of payments or other program benefits to a participant
in the crop insurance program; and
(4) Issuance of payments or other benefits to an individual or
entity who is not a participant in the crop insurance program.
(d) Only a participant may seek an administrative review or
mediation under this subpart, as applicable.
[67 FR 13251, Mar. 22, 2002, as amended at 68 FR 37720, June 25, 2003]
Sec. 400.92 Appeals.
(a) Except for determinations of good farming practices, nothing in
this subpart prohibits a participant from filing an appeal of an adverse
decision directly with NAD in accordance with part 11 of this title
without first requesting administrative review or mediation under this
subpart.
(b) If the participant has timely requested administrative review or
mediation, the participant may not participate in a NAD hearing until
such administrative review or mediation is
[[Page 17]]
concluded. The time for appeal to NAD is suspended from the date of
receipt of a request for administrative review or mediation until the
conclusion of the administrative review or mediation. The participant
will have only the remaining time to appeal to NAD after the conclusion
of the administrative review or mediation.
[67 FR 13251, Mar. 22, 2002, as amended at 68 FR 37720, June 25, 2003]
Sec. 400.93 Administrative review.
(a) With respect to adverse decisions, an appellant may seek one
administrative review or seek mediation under Sec. 400.94, but not
both.
(b) If the appellant seeks an administrative review, the appellant
must file a written request for administrative review with the reviewing
authority in accordance with Sec. 400.95. The written request must
state the basis upon which the appellant relies to show that:
(1) The decision was not proper and not made in accordance with
applicable program regulations and procedures; or
(2) All material facts were not properly considered in such
decision.
(c) The reviewing authority will issue a written decision that will
not be subject to further administrative review by the Agency.
[67 FR 13251, Mar. 22, 2002, as amended at 68 FR 37720, June 25, 2003]
Sec. 400.94 Mediation.
For adverse decisions only:
(a) Appellants have the right to seek mediation or other forms of
alternative dispute resolution instead of an administrative review under
Sec. 400.93.
(b) All requests for mediation under this subpart must be made after
issuance of the adverse decision by the Agency and before the appellant
has a NAD hearing on the adverse decision.
(c) An appellant who chooses mediation must request mediation not
later than 30 calendar days from receipt of the written notice of the
adverse decision. A request for mediation will be considered to have
been ``filed'' when personally delivered in writing to the appropriate
decision maker or when the properly addressed request, postage paid, is
postmarked.
(d) An appellant will have any balance of the days remaining in the
30-day period to appeal to NAD if mediation is concluded without
resolution. If a new adverse decision that raises new matters or relies
on different grounds is issued as a result of mediation, the participant
will have a new 30-day period for appeals to NAD.
(e) An appellant is responsible for contacting the Certified State
Mediation Program in States where such mediation program exists. The
State mediation program will make all arrangements for the mediation
process. A list of Certified State Mediation Programs is available at
http://www.act.fcic.usda.gov.
(f) An appellant is responsible for making all necessary contacts to
arrange for mediation in non-certified States or in certified States
that are not currently offering mediation on the subject in dispute. An
appellant needing mediation in States without a certified mediation
program may request mediation by contacting the RSO, which will provide
the participant with a list of acceptable mediators.
(g) An appellant may only mediate an adverse decision once.
(h) If the dispute is not completely resolved in mediation, the
adverse decision that was the subject of the mediation remains in effect
and becomes the adverse decision that is appealable to NAD.
(i) If the adverse decision is modified as a result of the mediation
process, the modified decision becomes the new adverse decision for
appeal to NAD.
Sec. 400.95 Time limitations for filing and responding to requests
for administrative review.
(a) A request for administrative review must be filed within 30 days
of receipt of written notice of the adverse decision. A request for an
administrative review will be considered to have been ``filed'' when
personally delivered in writing to the appropriate decision maker or
when the properly addressed request, postage paid, is postmarked.
(b) Notwithstanding paragraph (a) of this section, an untimely
request for administrative review may be accepted and acted upon if the
participant can demonstrate a physical inability to
[[Page 18]]
timely file the request for administrative review.
[67 FR 13251, Mar. 22, 2002, as amended at 68 FR 37720, June 25, 2003]
Sec. 400.96 Judicial review.
Except as provided in Sec. 400.98, with respect to adverse
determinations:
(a) A participant must exhaust administrative remedies before
seeking judicial review of an adverse decision. This requires the
participant to appeal an Agency adverse decision to NAD in accordance
with 7 CFR part 11 prior to seeking judicial review of the adverse
decision.
(b) If the adverse decision involves a matter determined by the
Agency to be not appealable, the appellant must request a determination
of non-appealability from the Director of NAD, and appeal the adverse
decision to NAD if the Director determines that it is appealable, prior
to seeking judicial review.
(c) A participant with a contract of insurance reinsured by the
Agency may bring suit against the Agency if the suit involves an adverse
action in a United States district court after exhaustion of
administrative remedies as provided in this section. Nothing in this
section can be construed to create privity of contract between the
Agency and a participant.
[67 FR 13251, Mar. 22, 2002, as amended at 68 FR 37720, June 25, 2003]
Sec. 400.97 Reservations of authority.
(a) Representatives of the Agency may correct all errors in entering
data on program contracts and other program documents, and the results
of computations or calculations made pursuant to the contract.
(b) Nothing contained in this subpart precludes the Secretary, the
Manager of FCIC, or the Administrator of RMA, or a designee, from
determining at any time any question arising under the programs within
their respective authority or from reversing or modifying any adverse
decision.
Sec. 400.98 Reconsideration process.
(a) This reconsideration process only applies to determinations of
good farming practices under Sec. 400.91(a)(2).
(b) There is no appeal to NAD of determinations or reconsideration
decisions regarding good farming practices.
(c) Only reconsideration is available for determinations of good
farming practices. Mediation is not available for determinations of good
farming practices.
(d) If the insured seeks reconsideration, the insured must file a
written request for reconsideration to the following: USDA/RMA/Deputy
Administrator for Insurance Services/Stop 0805, 1400 Independence Avenue
SW., Washington, DC 20250-0801.
(1) A request for reconsideration must be filed within 30 days of
receipt of written notice of the determination regarding good farming
practices. A request for reconsideration will be considered to have been
``filed'' when personally delivered in writing to FCIC or when the
properly addressed request, postage paid, is postmarked.
(2) Notwithstanding paragraph (d)(1) of this section, an untimely
request for reconsideration may be accepted and acted upon if the
insured can demonstrate a physical inability to timely file the request
for reconsideration.
(3) The written request must state the basis upon which the insured
relies to show that:
(i) The decision was not proper and not made in accordance with
applicable program regulations and procedures; or
(ii) All material facts were not properly considered in such
decision.
(e) With respect to determinations of good farming practices, the
insured is not required to exhaust the administrative remedies in 7 CFR
part 11 before bringing suit against FCIC in a United States district
court. However, regardless of whether the Agency or the reinsured
company makes the determination, the insured must seek reconsideration
under Sec. 400.98 before bringing suit against FCIC in a United States
District Court. The insured cannot file suit against the reinsured
company for determinations of good farming practices.
(f) Any reconsideration decision by the Agency regarding good
farming practices shall not be reversed or modified as a result of
judicial review unless
[[Page 19]]
the reconsideration decision is found to be arbitrary or capricious.
[68 FR 37720, June 25, 2003]
Subpart K_Debt Management_Regulations for the 1986 and Succeeding Crop
Years
Authority: Secs. 506, 516, Pub. L. 75-430, 52 Stat. 73, 77, as
amended (7 U.S.C. 1506, 1516).
Source: 51 FR 17316, May 12, 1986, unless otherwise noted.
Sec. 400.115 Purpose.
This subpart sets forth procedures that will be followed, and the
rights afforded to debtors, in connection with the reporting by the
Federal Crop Insurance Corporation (FCIC) to credit reporting agencies
of information with respect to current and delinquent debts owed to
FCIC, and in connection with referral of delinquent debts to contract
collection agencies.
Sec. 400.116 Definitions.
(a) Credit reporting agency means (1) a reporting agency as defined
at 4 CFR 102.5(a), or (2) any entity which has entered into an agreement
with USDA concerning the referral of credit information.
(b) Collection agency means a private debt collection contractor
under Federal Supply Schedule contract with the General Services
Administration (GSA) for professional debt collection services.
(c) Comptroller means the employee of FCIC filling that position or
the person designated by the Comptroller to perform that function.
(d) Debt and claim are deemed synonymous and are used
interchangeably herein. The debt or claim is an amount of money which
has been determined by an appropriate agency official to be owed to FCIC
by any individual, organization or entity, except another Federal
agency; State, local or foreign government or agencies thereof; Indian
tribal governments; or other public institutions.
The debt or claim may have arisen from overpayment, premium non-payment,
interest, penalties, reclamations resulting from payments under good
faith reliance provisions, or other causes.
(e) Delinquent debt means (1) any debt owed to FCIC that has not
been paid by the termination date specified in the applicable contract
of insurance, or other due date for payment contained in any other
agreement, or notification of indebtedness, and (2) any overdue amount
owed to FCIC by a debtor which is the subject of an installment payment
agreement which the debtor has failed to satisfy under the terms of such
agreement.
(f) System of records means a group of any records under the control
of FCIC from which information is retrieved by the name of the
individual by some identifying number, symbol, or other identification
assigned to the individual.
(g) Request for review means that request submitted to FCIC by a
debtor for a review of the facts resulting in the determination of
indebtedness to FCIC. FCIC allows 45 days for such request and any
request submitted within that period is considered a timely request.
Sec. 400.117 Determination of delinquency.
Prior to disclosing information about a debt to a credit reporting
agency in accordance with this subpart, the FCIC claims official,
designated as the Comptroller, FCIC, or the designee of the Comptroller
who has jurisdiction over the claim, shall review the claim and
determine that the claim is valid and overdue.
Sec. 400.118 Demand for payment.
The Comptroller who is responsible for carrying out the provisions
of this subpart with respect to the debt shall send to the debtor
appropriate written demands for payment in terms which inform the debtor
of the consequences of failure to make payment, in accordance with
guidelines established by the Manager, FCIC, the Federal Claims
Collection Standards at 4 CFR 102.2, or the contract between the General
Services Administration (GSA) and the collection agency.
[[Page 20]]
Sec. 400.119 Notice to debtor; credit reporting agency.
(a) In accordance with guidelines established by the Manager, FCIC,
the Comptroller who is responsible for disclosure of information with
respect to delinquent debts to a credit reporting agency shall send
written notice to the delinquent debtors that FCIC intends to disclose
credit information to a credit reporting agency on a regular basis. In
addition, delinquent debtors are to be informed:
(1) Of the basis for the indebtedness;
(2) That the payment is overdue;
(3) That FCIC intends to disclose to a credit reporting agency that
the debtor is responsible for the debt and with respect to an
individual, that such disclosure shall be made not less than 60 days
after notification to such debtor;
(4) Of the specific information intended to be disclosed to the
credit reporting agency;
(5) Of the rights of such debtor to a full explanation of the claim
and to dispute any information in the system of records of FCIC
concerning the claim;
(6) Of the debtor's right to administrative appeal or review with
respect to the claim and how such review shall be obtained; and
(7) Of the date after which the information will be reported to the
credit reporting agency.
(b) The content and standards for demand letters and notices sent
under this section shall be consistent with the Federal Claims
Collection Standards at 4 CFR 102.2.
Sec. 400.120 Subsequent disclosure and verification.
(a) FCIC shall promptly notify each credit reporting agency to which
the original disclosure of debt information was made of any substantial
change in the condition or amount of the claim. A substantial change in
condition may include, but is not limited to, notice of death, cessation
of business, or relocation of the debtor. A substantial change in the
amount may include, but is not limited to, payments received, additional
amounts due, or offsets made with respect to the debt.
(b) FCIC shall promptly verify or correct, as appropriate,
information about the claim or request of such credit reporting agency
for verification of any or all information so disclosed. The records of
the debtor shall reflect any correction resulting from such request.
(c) FCIC shall obtain satisfactory assurances from each reporting
agency to which information will be provided that the agency is in
compliance with the provisions of all laws and regulations of the United
States relating to providing credit information.
Sec. 400.121 Information disclosure limitations.
FCIC shall limit delinquent debt information disclosed to credit
reporting agencies to:
(a) The name, address, taxpayer identification number, and other
information necessary to establish the identity of the debtor;
(b) The amount, status, and history of the claim; and
(c) The FCIC program under which the claim arose.
Sec. 400.122 Attempts to locate debtor.
Before disclosing delinquent debt information to a credit reporting
agency, FCIC shall take reasonable action to locate a debtor for whom
FCIC does not have a current address in order to send the notification
in accordance with Sec. 400.119 of this subpart.
Sec. 400.123 Request for review of the indebtedness.
(a) Before disclosing delinquent debt information to a credit
reporting agency, FCIC shall, upon request of the debtor, provide for a
review of the claim, including an opportunity for reconsideration of the
initial decision concerning the existence or amount of the claim, in
accordance with applicable administrative appeal procedures.
(b) Upon receipt of a timely request for review, FCIC shall suspend
its schedule for disclosure of delinquent debt information to a credit
reporting agency until such time as a final decision is made on the
request.
(c) Upon completion of the review, the reviewing office shall
transmit to the debtor a written notification of the decision. If
appropriate, notification shall inform the debtor of the scheduled date
on or after which information
[[Page 21]]
concerning the debt will be provided to the credit reporting agency. The
notification shall, if appropriate, also indicate any changes in the
information to be disclosed to the extent such information differs from
that provided in the initial notification.
Sec. 400.124 Disclosure to credit reporting agencies.
(a) In accordance with guidelines established by the Manager, FCIC,
the Comptroller or designated manager of the systems of records shall
disclose to credit reporting agencies the information specified in Sec.
400.121.
(b) Disclosure of information to credit reporting agencies shall be
made on or after the date specified in Sec. Sec. 400.119(a)(3) and
400.125 and shall be comprised of the information set forth in the
initial determination or any modification thereof.
(c) This section shall not apply to disclosure of delinquent debts
when:
(1) The debtor has agreed to a repayment agreement for such debt and
such agreement is still valid; or
(2) The debtor has filed for review of the debt and the reviewing
official or designee has not issued a decision on the review.
Sec. 400.125 Notice to debtor, collection agency.
FCIC shall provide 30 days written notice to the debtor, mailed to
the debtor's last known address, of FCIC's intent to forward the debt to
a collection agency for further collection action.
Sec. 400.126 Referral of delinquent debts to contract collection
agencies.
(a) FCIC shall use the services of a contract collection agency
which has entered into a contract with the General Services
Administration to recover debts owed to FCIC.
(b) If FCIC's collection efforts have been unsuccessful on a
delinquent debt, and the delinquent debt remains unpaid, FCIC may refer
the debt to a contract collection agency for collection.
(c) FCIC shall retain the authority to resolve disputes, compromise
claims, suspend or terminate collection action, and refer the matter for
litigation.
Sec. 400.127 [Reserved]
Sec. 400.128 Definitions.
(a) Agency means (1) An Executive Agency as defined by 5 U.S.C. 105,
the United States Postal Service, and the United States Postal Rate
Commission, or (2) A Military Department, as defined by section 102 of
Title 5 U.S.C.
(b) Debt means:
(1) An amount owed to the United States from sources including, but
not limited to, insured or guaranteed loans, fees, leases, insurance
premiums, interest (except where prohibited by law), rents, royalties,
services, sale of real or personal property, overpayments, penalties,
damages, fines and forfeitures (except those arising under the Uniform
Code of Military Justice).
(2) An amount owed to the United States by an employee for pecuniary
losses where the employee has been determined to be liable because of
such employee's negligent, willful, unauthorized or illegal acts,
including but not limited to:
(i) Theft, misuse, or loss of Government funds;
(ii) False claims for services and travel reimbursement;
(iii) Illegal, unauthorized obligations and expenditures of
Government appropriations;
(iv) Using or authorizing the use of Government owned or leased
equipment, facilities, supplies and services for other than official or
approved purposes;
(v) Lost, stolen, damaged, or destroyed Government property;
(vi) Erroneous entries on accounting records or reports; and
(vii) Deliberate failure to provide physical security and control
procedures for accountable officers, if such failure is determined to be
the proximate cause for a loss of Government funds.
(c) Department or USDA means the United States Department of
Agriculture.
(d) Disposable salary (pay) means any pay due an employee which
remains after required deductions for Federal, State and local income
taxes; Social Security taxes, including Medicare taxes; Federal
retirement programs; premiums for life and health insurance
[[Page 22]]
benefits; and such other deductions as may be required by law to be
withheld.
(e) Employee means a current employee of an agency, including a
current member of the Armed Forces or a Reserve of the Armed Forces.
(f) FCIC Official means the Manager, or the Manager's designee.
(g) Hearing Officer means an Administrative Law Judge of the
Department of Agriculture or another person not under the control of the
USDA, designated by the FCIC Official to review the determination of the
alleged debt.
(h) Salary Offset means a deduction of a debt due the U.S. by
deduction from the disposable salary of an employee without the
employee's consent.
(i) Waiver means the cancellation, remission, forgiveness, or non-
recovery of a debt owed by an employee as permitted or required by 5
U.S.C. 5584, 10 U.S.C. 2774, 32 U.S.C. 716, 5 U.S.C. 8346(b), or any
other law.
[53 FR 3, Jan. 4, 1988, and 53 FR 10527, Apr. 1, 1988]
Sec. 400.129 Salary offset.
(a) Debt collection by salary offset is feasible if: the cost to the
Government of collection by salary offset does not exceed the amount of
the debt; there are no legal restrictions to the debt, such as the
debtor being under the jurisdiction of a bankruptcy court or the
expiration of a statute of limitations; or, other such legal
restrictions. The Debt Collection Act permits collections of debts by
offset for claims that have not been outstanding for more than 10 years.
(b) The salary offset provisions contained herein provide procedures
which must be followed before FCIC may request another Federal agency to
offset any amount from the debtor's salary. Decisions made under the
provisions of this section are not appealable under the provisions of
the Appeal Regulations in part 400, subpart J of this title.
(c) These regulations will not apply to any case where collection of
a debt by salary offset is explicitly provided for by another statue as
noted by the Comptroller General in 64 Comp. Gen. 142 (1984), including
5 U.S.C. 5512(a), 5 U.S.C. 5513, 5 U.S.C. 5522(a) (1), 5 U.S.C. 5705 (1)
and (2), and 5 U.S.C. 5724(f).
(d) Salary offset may be used by FCIC to collect debts which arise
from delinquent FCIC premium payments or delinquent repayment plans and
other debts arising from, but not limited to, such sources as program
theft, embezzlement, fraud, salary overpayments, underwithholding of any
amounts due and payable for life and health insurance, advance travel
payments, overpaid indemnities, and any amount owed by present or former
employees from loss of federal funds through negligence and other
matters. The debt does not have to be reduced to judgment and does not
have to be covered by a security instrument.
(e) FCIC may use salary offset against one of its employees who is
indebted to another agency if requested to do so by that agency. Salary
offset will not be initiated until after other servicing options
available to the requesting agency have been utilized, and due process
has been afforded to the FCIC employee. When salary offset is utilized,
payment for the debt will be deducted from the employee's salary and
sent directly to the creditor agency. Not more than fifteen percent
(15%) of the employee's disposable salary can be offset in any one pay
period, unless the employee agrees in writing to the deduction of a
larger amount.
(f) When FCIC is owed a debt by an employee of another agency, the
other agency shall not initiate the requested offset until FCIC provides
the agency with a written certification that the debtor owes FCIC a debt
(including the amount and basis of the debt and the due date of the
payment), and that FCIC has complied with Department regulations. If a
repayment schedule is elected by the employee, interest will be charged
in accordance with Departmental Regulation 2520-1, Interest Rate on
Delinquent Debts; USDA Debt Collection Regulations in 7 CFR part 3; and
4 CFR 102.13.
(g) For the purposes of this section, the Manager, FCIC, or the
Manager's designee, is delegated authority to:
(1) Certify to the debtor's employing agency that the debt exists
and the amount of the debt or delinquent balance;
[[Page 23]]
(2) Certify that, with respect to debt collection, the procedures
and regulations of FCIC and the Department have been complied with; and
(3) Request that salary offset be initiated by the debtor's
employing agency.
[53 FR 3, Jan. 4, 1988, and 53 FR 10527, Apr. 1, 1988]
Sec. 400.130 Notice requirements before offset.
Salary offset will not be made unless the employee receives 30
calendar days written notice. The notice of intent to offset salary
(notice of intent) will state:
(a) That FCIC has reviewed the records relating to the debt and has
determined that the debt is owed, and has verified the amount of the
debt, and the facts giving rise to the debt;
(b) That FCIC intends to deduct an amount not to exceed 15% of the
employees current disposable salary until the debt and all accumulated
interest are paid in full;
(c) The amount, frequency, approximate beginning date, and duration
of the intended deductions;
(d) An explanation of the requirements concerning interest,
penalties, and administrative costs, including a statement that these
assessments will be made unless waived in accordance with 31 U.S.C. 3717
and 7 CFR 3.34;
(e) That FCIC's records concerning the debt are available to the
employee for inspection and that the employee may request a copy of such
records;
(f) That the employee has a right to voluntarily enter into a
written agreement with FCIC for a repayment schedule with FCIC, which
may be different from that proposed by FCIC, if the terms of the
repayment agreement are agreed to by FCIC;
(g) That the employee has the right to a hearing conducted by an
Administrative Law Judge of USDA, or a hearing official not under the
control of USDA, concerning the determination of the debt, the amount of
the debt, or the percentage of disposable salary to be deducted each pay
period, if the petition for a hearing is filed by the employee as
prescribed by FCIC;
(h) The method and time period allowable for a petition for a
hearing;
(i) That the timely filing of a hearing petition will stay the
offset collection proceedings;
(j) That a final decision on the hearing will be issued at the
earliest practical date, but not later than 60 calendar days after the
filing of the petition, unless the employee requests, and the hearing
officer grants, a delay in the proceedings;
(k) That any knowingly false or frivolous statement, representation,
or evidence may subject the employee to:
(1) Disciplinary procedures appropriate under 5 U.S.C. Chapter 75, 5
CFR part 752, or any other applicable Statutes or regulations;
(2) Penalties under the False Claims Act, 31 U.S.C. 3729-3731, or
any other applicable statutory authority: or
(3) Criminal penalties under 18 U.S.C. 286, 287, 1001, and 1002, or
any other applicable statutory authority;
(l) Any other rights or remedies available to the employee under any
statute or regulations governing the program for which collection is
being made;
(m) That the employee may request waiver of salary overpayment under
applicable statutory authority (5 U.S.C. 5584, 10 U.S.C. 2774, 32 U.S.C
716, or 5 U.S.C 8346(b)), or may request waiver in the case of general
debts and if waiver is available under any statutory provision
pertaining to the particular debt being collected. The employee may
question the amount or validity of the salary overpayment or general
debt by submitting a claim to the Comptroller General in accordance with
General Accounting Officer procedure.
(n) That amounts paid on or deducted for the debt which are later
waived or found not to be owed to the United States will be promptly
refunded to the employee, unless there are applicable contractual or
statutory provisions to the contrary; and
(o) The name and address of an official of FCIC to whom the employee
should direct any communication with respect to the debt.
[53 FR 4, Jan. 4, 1988, and 53 FR 10527, Apr. 1, 1988]
[[Page 24]]
Sec. 400.131 Request for a hearing and result if an employee fails
to meet deadlines.
(a) Except as provided in paragraph (c) of this section, an employee
must file a petition for hearing that is received by the FCIC Official
not later than 30 calendar days from the date of the notice of intent to
collect a debt by salary offset, if the employee wants a hearing
concerning:
(1) The existence or amount of the debt; or
(2) The FCIC Official's proposed offset schedule, including the
percentage of deduction.
(b) The petition must be signed by the employee and should clearly
identify and explain with reasonable specificity and brevity the facts,
evidence and witnesses which the employee believes support the his or
her position. If the employee objects to the percentage of disposable
salary to be deducted from each check, the petition should state the
objection and the reasons for it.
(c) If the employee files a petition for hearing later than the 30
days provided in paragraph (a) of this section, the FCIC Official may
accept the petition if the employee is able to show that the delay
caused by conditions beyond his or her control, or because the employee
failed to received the notice of the filing deadline (unless the
employee has actual notice of the deadline).
(d) An employee will not be granted a hearing and will have his or
her disposable salary offset in accordance with the FCIC Official's
announced schedule if the employee:
(1) Fails to file a petition for hearing as set forth in this
subsection; or
(2) Is scheduled to appear and fails to appear at the hearing.
[53 FR 4, Jan. 4, 1988, and 53 FR 10527, Apr. 1, 1988]
Sec. 400.132 Hearings.
(a) If an employee timely files a petition for a hearing, the FCIC
Official will select the date, time, and location for the hearing.
(b) The hearing shall be conducted by an appropriately designated
Hearing Official.
(c) Rules of evidence shall not be observed, but the hearing officer
will consider all evidence that he or she determines to be relevant to
the debt that is the subject of the hearing, and weigh all such evidence
accordingly, given all the facts and circumstances surrounding the debt.
(d) The burden of proof with respect to the existence of the debt
rests with FCIC.
(e) The employee requesting the hearing shall bear the ultimate
burden of proof.
(f) The evidence presented by the employee must prove that no debt
exists, or cast sufficient doubt such that reasonable minds could differ
as to the existence of the debt.
[53 FR 5, Jan. 4, 1988, and 53 FR 10527, Apr. 1, 1988]
Sec. 400.133 Written decision following a hearing.
(a) At the conclusion of the hearing, a written decision will be
provided which will include:
(1) A statement of the facts presented at the hearing supporting the
nature and origin of the alleged debt and those presented to refute the
debt;
(2) The hearing officer's analysis, findings, and conclusions,
considering all the evidence presented and the respective burdens of the
parties, in light of the hearing;
(3) The amount and validity of the alleged debt determined as a
result of the hearing;
(4) The payment schedule (including the percentage of disposable
salary), if applicable; and
(5) The determination of the amount of the debt at this hearing is
the final agency action on this matter.
[53 FR 5, Jan. 4, 1988, and 53 FR 10527, Apr. 1, 1988]
Sec. 400.134 Review of FCIC record related to the debt.
An employee who intends to inspect or copy FCIC records related to
the debt must send a letter to the FCIC official (designated in the
notice of intent) stating his or her intentions. The letter must be
received by the FCIC official within 30 calender days of the date of the
notice of intent. In response to the timely notice submitted by the
debtor, the FCIC official will notify the employee of the location and
time
[[Page 25]]
when the employee may inspect and copy FCIC records related to the debt.
[53 FR 5, Jan. 4, 1988, and 53 FR 10527, Apr. 1, 1988]
Sec. 400.135 Written agreement to repay debt as an alternative to
salary offset.
The employee may propose, in response to a notice of intent, a
written agreement to repay the debt as an alternative to salary offset.
The proposed written agreement to repay the debt must be received by the
FCIC official within 30 calendar days of the date of the notice of
intent. The FCIC official will notify the employee whether the
employee's proposed written agreement for repayment is acceptable. The
FCIC official may accept a repayment agreement instead of proceeding by
offset. In making this determination, the FCIC official will balance the
FCIC interest in collecting the debt against hardship to the employee.
If the debt is delinquent and the employee has not disputed its
existence or amount, the FCIC official will accept a repayment
agreement, instead of offset, for good cause such as, if the employee
establishes that offset would result in undue financial hardship, or
would be against equity and good conscience.
[53 FR 5, Jan. 4, 1988, and 53 FR 10527, Apr. 1, 1988]
Sec. 400.136 Procedures for salary offset; when deductions may begin.
(a) Deductions to liquidate an employee's debt will be made by the
method and in the amount outlined in the Notice of Intent to collect
from the employee's salary, as provided for in Sec. 400.130.
(b) If the employee files a petition for a hearing before the
expiration of the period provided for in Sec. 400.130, then deductions
will begin after the hearing officer has provided the employee with a
final written decision in favor of FCIC.
(c) If an employee retires or resigns before collection of the
amount of the indebtedness is completed, the remaining indebtedness will
be collected in accordance with procedures for administrative offset.
[53 FR 5, Jan. 4, 1988, and 53 FR 10527, Apr. 1, 1988]
Sec. 400.137 Procedures for salary offset; types of collection.
A debt will be collected in a lump-sum or in installments.
Collection will be by lump-sum collection unless the employee is
financially unable to pay in one lump-sum, or if the amount of the debt
exceeds 15 percent of the disposable pay for an ordinary pay period. In
these cases, deduction will be by installments as set forth in Sec.
400.138.
[53 FR 5, Jan. 4, 1988, and 53 FR 10527, Apr. 1, 1988]
Sec. 400.138 Procedures for salary offset; methods of collection.
(a) General. A debt will be collected by deductions at officially-
established pay intervals from an employee's current pay account, unless
the employee and the hearing official agree to alternative arrangements
for repayment under Sec. 400.135.
(b) Installment deductions. Installment deductions will be made over
a period not greater than the anticipated period of employment. The size
and frequency of the installment deductions will bear a reasonable
relation to the size of the debt and the employee's ability to pay. If
possible, the installment payment will be sufficient in size and
frequency to liquidate the debt in no more than three years. Installment
payments of less than $25.00 per pay period, or $50.00 per month, will
be accepted only in the most unusual circumstances.
[53 FR 5, Jan. 4, 1988, and 53 FR 10527, Apr. 1, 1988]
Sec. 400.139 Nonwaiver of rights.
So long as there are no statutory or contractual provisions to the
contrary, no employee payment (or all or portion of a debt) collected
under these regulations will be interpreted as a waiver of any rights
that the employee may have under the provisions of 5 U.S.C. 5514.
[53 FR 5, Jan. 4, 1988, and 53 FR 10527, Apr. 1, 1988]
[[Page 26]]
Sec. 400.140 Refunds.
FCIC will promptly refund to the appropriate individual amounts
offset under these regulations when:
(a) A debt is waived or otherwise found not owing to the United
States (unless expressly prohibited by statute or regulation); or
(b) FCIC is directed by an administrative or judicial order to
refund amounts deducted from an employee's current pay.
[53 FR 5, Jan. 4, 1988, and 53 FR 10527, Apr. 1, 1988]
Sec. 400.141 Internal Revenue Service (IRS) Tax Refund Offset.
Under the provisions of 31 U.S.C. 3720A, the (IRS) may be requested
to collect a legally enforceable debt owing to any Federal agency by
offset against a taxpayer's Federal income tax refund. This section
provides policies and procedures to implement IRS tax refund offsets in
accordance with the provisions set forth in Sec. 301.6402-6T of 26 CFR
chapter I.
(a) Any person who is indebted to the Federal Crop Insurance
Corporation (FCIC) is entitled to the extent of FCIC's administrative
due process including review and appeal of the debt under the Appeal
Regulations in 7 CFR part 400, subpart J.
(b) If, after such administrative due process is exhausted, the debt
is still outstanding with no other means of collection, the debtor will
be notified by letter of FCIC's intention to refer such debt to the IRS
for collection by tax refund offset. The notification letter will inform
the debtor that their account is delinquent and that IRS will be
requested to reduce the amount of any tax refund check due the debtor by
the amount of the deliquency. The debtor will be given 60 days in which
to write to the Manager, FCIC, providing written evidence that the debt
is not legally enforceable. FCIC will refer the debt to IRS for
collection by offset after the 60-day period if no response is received
from the debtor. Decisions made under the provisions of this section are
not appealable under the provisions of the Appeal Regulations in 7 CFR
part 400, subpart J.
(c) If the debtor has requested a review, and has provided written
evidence that the debt is not legally enforceable, the Manager, with the
assistance of the Office of General Counsel, USDA, will review the
debtor's reasons for believing that the debt is not legally enforceable.
The debtor will then be notified of the results of the review.
(d) FCIC will notify IRS of those accounts against which offset
action is to be taken.
(e) If, during the period of review, the debtor pays the debt in
full, the collection of the debt by tax refund offset procedure will be
halted. Changes in debtor status that eliminate the debtor from IRS
offset will be reported to IRS by FCIC and the debtor's refund will not
be offset.
(f) Amounts offset for delinquent debt which are later found to be
not owed to FCIC, will be promptly refunded.
(g) Debtors will not be subject to IRS offset for any of the
following reasons:
(1) Debtors who are discharged in bankruptcy or who are under the
jurisdiction of a bankruptcy court;
(2) Debtors who are employed by the Federal Government;
(3) Debtors whose cases are in suspense because of actions pending
by or taken by FCIC;
(4) Debtors who have not provided a Social Security Number (SSN) and
no SSN can be obtained;
(5) Debtors whose indebtedness is less than $25;
(6) Debtors whose account is more than ten (10) years delinquent;
except in the case of a judgment debt; or
(7) Debtors whose account has not been first reported to a consumer
credit reporting agency.
[53 FR 5, Jan. 4, 1988, and 53 FR 10527, Apr. 1, 1988]
Sec. 400.142 Past-due legally enforceable debt eligible for refund
offset.
For purposes of this section, a past-due, legally enforceable debt
which may be referred by FCIC to IRS for offset is a debt which:
(a) Except in the case of a judgement debt, has been delinquent for
at least three months but has not been delinquent for more than 10 years
at the time the offset is made;
[[Page 27]]
(b) Cannot be currently collected pursuant to the salary offset
provisions of 5 U.S.C. 5514(a)(1);
(c) Is ineligible for administrative offset under 31 U.S.C. 3716(a)
by reason of 31 U.S.C. 3716(c)(2), or cannot be collected by
administrative offset under 31 U.S.C. 3716(a) by the referring agency
against amounts payable to the debtor by the referring agency;
(d) With respect to which the agency has given the employee at least
60 days to present evidence that all or part of the debt is not past-due
or legally enforceable, has considered evidence presented by such
employee, and has determined that an amount of such debt is past-due and
legally enforceable;
(e) Has been disclosed by FCIC to a consumer reporting agency as
authorized by 31 U.S.C. 3711(f), in the case of a debt to be referred to
IRS after June 30, 1986;
(f) With respect to which that FCIC has notified, or has made a
reasonable attempt to notify, the employee that:
(1) The debt is past due; and
(2) Unless repaid within 60 days thereafter, will be referred to IRS
for offset against any overpayment of tax; and
(3) Which is at least $25.00.
[53 FR 6, Jan. 4, 1988, and 53 FR 10527, Apr. 1, 1988]
Subpart L_Reinsurance Agreement_Standards for Approval; Regulations for
the 1997 and Subsequent Reinsurance Years
Authority: 7 U.S.C. 1506(l), 1506(p).
Source: 52 FR 17543, May 11, 1987, unless otherwise noted.
Redesignated at 53 FR 3, Jan. 4, 1988, and further redesignated at 53 FR
10527, Apr. 1, 1988.
Sec. 400.161 Definitions.
In addition to the terms defined in the Standard Reinsurance
Agreement, the following terms as used in this rule are defined to mean:
(a) Annual Statutory Financial Statement means the annual financial
statement of an insurer prepared in accordance with Statutory Accounting
Principles and submitted to the state insurance department if required
by any state in which the insurer is licensed.
(b) Company means the company reinsured by FCIC or apply to FCIC for
a Standard Reinsurance Agreement.
(c) Corporation means the Federal Crop Insurance Corporation.
(d) FCIC means the Federal crop Insurance Corporation.
(e) Financial statement means any documentation submitted by a
company as required by this subpart.
(f) Guaranty fund assessments means the state administered program
utilized by some state insurance regulatory agencies to obtain funds
with which to discharge unfunded obligations of insurance companies
licensed to do business in that state.
(g) Insurer means an insurance company that is licensed or admitted
as such in any State, Territory, or Possession of the United States.
(h) MPUL means the maximum possible underwriting loss that an
insurer can sustain on policies it intends to reinsure with FCIC, after
adjusting for the effect of any reinsurance agreement with FCIC, and any
outside reinsurance agreements, as evaluated by FCIC.
(i) Obligations mean crop or indemnity for crop loss on policies
reinsured under the Standard Reinsurance Agreement.
(j) Plan of operation means a statment submitted to FCIC each year
in which a reinsured or a prospective reinsured specifies the
reinsurance options it wishes to use, its marketing plan, and similar
information as required by the Corporation.
(k) Quarterly Statutory Financial Statement means the quarterly
financial statement of an insurer prepared in accordance with Statutory
Accounting Principles and submitted to the state insurance department if
required by any state in which the insurer is licensed.
(l) Reinsurance agreement means an agreement between two parties by
which an insurer cedes to a reinsurer certain liabilities arising from
the insurer's sale of insurance policies.
(m) Reinsured means the insurer which is a party to the Standard
Reinsurance Agreement with FCIC.
[[Page 28]]
(n) Standard Reinsurance Agreement (Agreement) means the reinsurance
agreement between the reinsured and FCIC.
[52 FR 17543, May 11, 1987. Redesignated at 53 FR 3, Jan. 4, 1988, and
53 FR 10527, Apr. 1, 1988, as amended at 57 FR 34666, Aug. 6, 1992; 60
FR 57903, Nov. 24, 1995]
Sec. 400.162 Qualification ratios.
The sixteen qualification ratios include:
(a) Eleven National Association of Insurance Commissioner's (NAIC's)
Insurance Regulatory Information System (IRIS) ratios found in
Sec. Sec. 400.170(d)(1)(ii) and 400.170(d)(2) (i), (ii), (iii), (vi),
(vii), (ix), (xi), (xii), (xiii), and (xiv) and referenced in ``Using
the NAIC Insurance Regulatory Information System'' distributed by NAIC,
120 West 12th St., Kansas City, MO 64105-1925;
(b) Three ratios used by A.M. Best Company found in Sec.
400.170(d)(2) (v), (viii), and (x) and referenced in Best's Key Rating
Guide, A.M. Best, Ambest Road, Oldwick, N.J. 08858-0700;
(c) One ratio found in Sec. 400.170(d)(1)(i) is calculated the same
as the Gross Premium to Surplus IRIS ratio, with Gross Premium adjusted
to exclude the MPCI premium assumed by FCIC; and
(d) One ratio found in Sec. 400.170(d)(2)(iv) which is formulated
by FCIC and is calculated the same as the One-Year Change to Surplus
IRIS ratio but for a two-year period.
[60 FR 57903, Nov. 24, 1995]
Sec. 400.163 Applicability.
The standards contained herein shall be applicable to insurers who
apply for or enter into a Standard Reinsurance Agreement effective for
the 1997 and subsequent reinsurance years or who continue with a prior
years Standard Reinsurance Agreement into the 1997 and subsequent
reinsurance years.
[60 FR 57903, Nov. 24, 1995]
Sec. 400.164 Availability of the Standard Reinsurance Agreement.
Federal Crop Insurance Corporation will offer Standard Reinsurance
Agreements to eligible Companies under which the Corporation will
reinsure policies which the Companies issue to producers of agricultural
commodities. The Standard Reinsurance Agreement will be consistent with
the requirements of the Federal Crop Insurance Act, as amended, and
provisions of the regulations of the Corporation found at chapter IV of
title 7 of the Code of Federal Regulations.
Sec. 400.165 Eligibility for Standard Reinsurance Agreements.
A Company will be eligible to participate in an Agreement if the
Corporation determines the Company meets the standards and reporting
requirements of this subpart.
Sec. 400.166 Obligations of the Corporation.
The Agreement will include the following among the obligations of
the Corporation.
(a) The Corporation will reinsure policies written on terms,
including premium rates, approved by the Corporation, on crops and in
areas approved by the Corporation, and in accordance with the provisions
of the Federal Crop Insurance Act, as amended, and the provisions of
these regulations.
(b) The Corporation will pay a portion of each producer's premium on
the policies reinsured under the Agreement, as authorized by the Federal
Crop Insurance Act, as amended.
(c) The Corporation will assume all obligations for unpaid losses on
policies reinsured under the Agreement in the event any company
reinsured under the Agreement is unable to fulfill its obligations to
any holder of a Multiple Peril Crop Insurance Policy reinsured by the
Corporation by reason of a directive or order issued by any State
Department of Insurance, State Commissioner of Insurance, any court of
law having competent jurisdiction or any other similar authority of any
jurisdiction to which the Company is subject.
(d) Each policy reinsured by the Corporation must be clearly
identified by including in bold face or large type the following
statement as item number 1 in its General Provisions:
This insurance policy is reinsured by the Federal Crop Insurance
Corporation under the provisions of the Federal Crop Insurance Act, as
amended (the Act) (7 U.S.C. 1501 et
[[Page 29]]
seq.), and all terms of the policy and rights and responsibilities of
the parties are specifically subject to the Act and the regulations
under the Act published in chapter IV of 7 CFR.
Sec. 400.167 Limitations on Corporation's obligations.
The Agreement will include the following among the limitations on
the obligations of the Corporation.
(a) The Corporation may, at any time, suspend its obligation to
accept additional liability from the Company by providing written notice
to that effect.
(b) The obligations of the Corporation under the Agreement are
contingent upon the availability of appropriations.
(c) The Corporation will not reinsure any policy sold by the Company
to a producer after the date Company receives notice that the
Corporation has determined that the producer is ineligible to receive
Federal Crop Insurance.
Sec. 400.168 Obligations of participating insurance company.
The Agreement will include the following among the obligations of
the Company.
(a) The Company shall follow all applicable Corporation procedures
in its administration of the crop insurance policies reinsured.
(b) The Company shall make available to all eligible producers in
the areas designated in its plan of operations as approved by the
Corporation:
(1) The crop insurance plans for the crops designated in its plan of
operation in those counties within a State, or a portion of a State,
where the Secretary of Agriculture has determined that insurance is
available through local offices of the United States Department of
Agriculture; and
(2) Catastrophic risk protection, limited, and additional coverage
plans of insurance for all crops, for which such insurance is made
available by the Corporation, in all counties within a state, or a
portion of State, where the Secretary of Agriculture has determined that
insurance is no longer available through local offices of the United
States Department of Agriculture.
(c) The Company shall provide the Corporation, on forms approved by
the Corporation all information that the Corporation may deem relevant
in the administration of the Agreement, including a list of all
applicants determined to be ineligible for crop insurance coverage and
all insured producers cancelled or terminated from insurance, along with
the reason for such action, the crop program, and the amount of coverage
for each.
(d) The Company shall utilize only loss adjustment procedures and
methods that are approved by the Corporation.
(e) The Company shall sell the policies covered under the Agreement
through licensed agents or brokers who have successfully completed a
training course approved by the Corporation.
(f) The Company shall not discriminate against any employee,
applicant for employment, insured or applicant for insurance because of
race, color, religion, sex age, handicap, or national origin.
[52 FR 17543, May 11, 1987. Redesignated at 53 FR 3, Jan. 4, 1988, and
53 FR 10527, Apr. 1, 1988, as amended at 61 FR 34368, July 2, 1996; 61
FR 65153, Dec. 11, 1996]
Sec. 400.169 Disputes.
(a) If the company believes that the Corporation has taken an action
that is not in accordance with the provisions of the Standard
Reinsurance Agreement or any reinsurance agreement with FCIC, except
compliance issues, it may request the Deputy Administrator of Insurance
Services to make a final administrative determination addressing the
disputed action. The Deputy Administrator of Insurance Services will
render the final administrative determination of the Corporation with
respect to the applicable actions. All requests for a final
administrative determination must be in writing and submitted within 45
days after receipt after the disputed action.
(b) With respect to compliance matters, the Compliance Field Office
renders an initial finding, permits the company to respond, and then
issues a final finding. If the company believes that the Compliance
Field Office's final finding is not in accordance with the
[[Page 30]]
applicable laws, regulations, custom or practice of the insurance
industry, or FCIC approved policy and procedure, it may request, the
Deputy Administrator of Compliance to make a final administrative
determination addressing the disputed final finding. The Deputy
Administrator of Compliance will render the final administrative
determination of the Corporation with respect to these issues. All
requests for a final administrative determination must be in writing and
submitted within 45 days after receipt of the final finding.
(c) A company may also request reconsideration by the Deputy
Administrator of Insurance Services of a decision of the Corporation
rendered under any Corporation bulletin or directive which bulletin or
directive does not interpret, explain, or restrict the terms of the
reinsurance agreement. The company, if it disputes the Corporation's
determination, must request a reconsideration of that determination in
writing, within 45 days of the receipt of the determination. The
determinations of the Deputy Administrator will be final and binding on
the company. Such determinations will not be appealable to the Board of
Contract Appeals.
(d) Appealable final administrative determinations of the
Corporation under paragraph (a) or (b) of this section may be appealed
to the Board of Contract Appeals in accordance with the provisions of
subtitle A, part 24 of title 7 of the Code of Federal Regulations.
[65 FR 3782, Jan. 25, 2000]
Sec. 400.170 General qualifications.
To qualify initially or thereafter for a Standard Reinsurance
Agreement with FCIC, an insurer must:
(a) Be licensed or admitted in any state, territory, or possession
of the United States;
(b) Be licensed or admitted, or use as a policy-issuing Company an
insurer that is licensed or admitted, in each state from which the
insurer will cede policies to FCIC for reinsurance;
(c) Have surplus, as reported in its most recent Annual or Quarterly
Statutory Financial Statement, that is at least equal to the MPUL for
the company's estimated retained premium proposed to be reinsured,
multiplied by the appropriate Minimum Surplus Factor found in the
Minimum Surplus Table. For the purposes of the Minimum Surplus Table, an
insurer is considered to issue policies in a state if at least two and
one-half percent (2.5%) of all its reinsured retained premium is written
in that state;
Minimum Surplus Table
------------------------------------------------------------------------
Minimum
surplus
Number of states in which a company issues FCIC-reinsured factor
policies (multiplied
by MPUL)
------------------------------------------------------------------------
1 through 10............................................... 2.5
11 or more................................................. 2.0
------------------------------------------------------------------------
(d) Have and meet the ratio requirements of the Gross Premium to
Surplus and Net Premium to Surplus required ratios and at least ten of
the fourteen analytical ratios in this section based on the most recent
Annual Statutory Financial Statement, or comply with Sec. 400.172:
------------------------------------------------------------------------
Ratio Ratio requirement
------------------------------------------------------------------------
(1) Required:
(i) Gross Premium to Surplus.......... Less than 900%.
(ii) Net Premium to Surplus........... Less than 300%.
(2) Analytical:
(i) Two-Year Overall Operating Ratio.. Less than 100%.
(ii) Agents' Balances to Surplus...... Less than 40%.
(iii) One-Year Change in Surplus...... Greater than -10% and less
than 50%.
(iv) Two-Year Change in Surplus....... Greater than -10%.
(v) Combined Ratio After Policyholder Less than 115%.
Dividends.
(vi) Change in Writing................ Greater than -33% and less
than 33%.
(vii) Surplus Aid to Surplus.......... Less than 15%.
(viii) Quick Liquidity................ Greater than 20%.
(ix) Liabilities to Liquid Asset...... Less than 105%.
(x) Return on Surplus................. Greater than -5%.
(xi) Investment Yield................. Greater than 4.5% and less
than 10%.
(xii) One-Year Reserve Development to Less than 20%.
Surplus.
(xiii) Two-Year Reserve Development to Less than 20%.
Surplus.
(xiv) Estimated Current Reserve Less than 25%.
Deficiency to Surplus.
------------------------------------------------------------------------
(e) Submit to FCIC all of the following statements:
[[Page 31]]
(1) Annual and Quarterly Statutory Financial Statements;
(2) Statutory Management Discussion & Analysis;
(3) Most recent State Insurance Department Examination Report;
(4) Actuarial Opinion of Reserves;
(5) Annual Audited Financial Report; and
(6) Any other appropriate financial information or explanation of
IRIS ratio discrepancies as determined by the company or as requested by
FCIC.
[60 FR 57903, Nov. 24, 1995]
Sec. 400.171 Qualifying when a state does not require that an
Annual Statutory Financial Statement be filed.
An insurer exempt by the insurance department of the states where
they are licensed from filing an Annual Statutory Financial Statement
must, in addition to the requirements of Sec. 400.170 (a), (b), (c) and
(d), submit an Annual Statutory Financial Statement audited by a
Certified Public Accountant in accordance with generally accepted
auditing standards, which if not exempted, would have been filed with
the insurance department of any state in which it is licensed.
[60 FR 57904, Nov. 24, 1995]
Sec. 400.172 Qualifying with less than two of the required ratios
or ten of the analytical ratios meeting the specified requirements.
An insurer with less than two of the required ratios or ten of the
analytical ratios meeting the specified requirements in Sec. 400.170(d)
may qualify if, in addition to the requirements of Sec. 400.170 (a),
(b), (c) and (e), the insurer:
(a) Submits a financial management plan acceptable to FCIC to
eliminate each deficiency indicated by the ratios, or an acceptable
explanation why a failed ratio does not accurately represent the
insurer's insurance operations; or
(b) Has a binding agreement with another insurer that qualifies such
insurer under this subpart to assume financial responsibility in the
event of the reinsured company's failure to meet its obligations on FCIC
reinsured policies.
[60 FR 57904, Nov. 24, 1995]
Sec. 400.173 [Reserved]
Sec. 400.174 Notification of deviation from financial standards.
An insurer must immediately advise FCIC if it deviates from
compliance with any of the requirements of this chapter. FCIC may
require the insurer to update its financial statements during the year.
FCIC may terminate the reinsurance agreement if the Company is out of
compliance with the requirements of this chapter.
[52 FR 17543, May 11, 1987. Redesignated at 53 FR 3, Jan. 4, 1988, and
53 FR 10527, Apr. 1, 1988, as amended at 60 FR 57904, Nov. 24, 1995]
Sec. 400.175 Revocation and non-acceptance.
(a) FCIC will deny reinsurance to any insurer or will terminate any
existing reinsurance agreement if any false or misleading statement is
made in the financial statements or any other document submitted by the
insurer in connection with its qualification for FCIC reinsurance.
(b) No policy issued by an insurer subsequent to revocation of a
reinsurance agreement will be reinsured by FCIC. Policies in effect at
the time of revocation will continue to be reinsured by FCIC for the
balance of the crop year then in effect for the applicable crop.
However, if materially false information is made to the Corporation and
that information directly affects the ability of the Company to perform
under the Agreement, or if the Company commits any fraudulent or
criminal act in relation to the Standard Reinsurance Agreement or any
policy reinsured under the Agreement, FCIC may require that the Company
transfer the servicing and contractual right to all business in effect
and reinsured by the Corporation to the Corporation.
[52 FR 17543, May 11, 1987. Redesignated at 53 FR 3, Jan. 4, 1988, and
53 FR 10527, Apr. 1, 1988, as amended at 60 FR 57904, Nov. 24, 1995]
Sec. 400.176 State action preemptions.
(a) No policyholder shall have recourse to any state guaranty fund
or similar state administered program for crop or premium losses
reinsured under such Standard Reinsurance Agreement. No assessments for
such State funds or programs shall be computed or levied
[[Page 32]]
on companies for or on account of any premiums payable on policies of
Multiple Peril Crop Insurance reinsured by the Corporation.
(b) No policy of insurance reinsured by the Corporation and no
claim, settlement, or adjustment action with respect to any such policy
shall provide a basis for a claim of punitive or compensatory damages or
an award of attorney fees or other costs against the Company issuing
such policy, unless a determination is obtained from the Corporation
that the Company, its employee, agent or loss adjuster failed to comply
with the terms of the policy or procedures issued by the Corporation and
such failure resulted in the insured receiving a payment in an amount
that is less than the amount to which the insured was entitled.
[52 FR 17543, May 11, 1987. Redesignated at 53 FR 3, Jan. 4, 1988, and
53 FR 10527, Apr. 1, 1988, as amended at 69 FR 48730, Aug. 10, 2004]
Sec. 400.177 [Reserved]
Subpart M_Agency Sales and Service Contract_Standards for Approval
Authority: 7 U.S.C. 1506, 1516.
Source: 53 FR 24015, June 27, 1988, unless otherwise noted.
Sec. 400.201 Applicability of standards.
Federal Crop Insurance Corporation will offer an Agency Sales and
Service Contract (the Contract) to private entities meeting the
requirements set forth in this subpart under which the Corporation will
insure producers of agricultural commodities. The Contract will be
consistent with the requirements of the Federal Crop Insurance Act, as
amended, and the provisions of the regulations of the Corporation found
at chapter IV of title 7 of the Code of Federal Regulations. The
Standards contained herein are required for an entity to be a contractor
under the Contract.
Sec. 400.202 Definitions.
For the purpose of these Standards:
(a) Agency Sales and Service Contract or the Contract means the
written agreement between the Federal Crop Insurance Corporation
(Corporation) and a private entity (Contractor) for the purpose of
selling and servicing Federal Crop Insurance policies and includes, but
is not limited to, the following:
(1) The Agency Sales and Service Contract;
(2) Any Appendix to the Agency Sales and Service Contract issued by
the Corporation;
(3) The annual approved Plan or Operation; and
(4) Any amendment adopted by the parties.
(b) BELL 208B (or compatible) modem--means a modem meeting the
standards developed by BELL Laboratories for dial-up, half-duplex, 4800
or 9600 bits per second (bps) transmission of data utilizing 3780 (or
2780) protocol.
(c) Contract, the see Agency Sales and Service Contract.
(d) Contractor's electronic system (system) means the data
processing hardware and software, data communications hardware and
software, and printers utilized with the system.
(e) CPA means a Certified Public Accountant who is licensed as such
by the State in which the CPA practices.
(f) CPA Audit means a professional examination conducted by a CPA in
accordance with generally accepted auditing standards of a Financial
Statement on the basis of which the CPA expresses an independent
professional opinion respecting the fairness of presentation of the
Financial Statement.
(g) Current Assets means cash and other assets that are reasonably
expected to be realized in cash or sold or consumed during the normal
operation cycle of the business or within one year if the operation
cycle is shorter than one year.
(h) Current Liabilities means those liabilities expected to be
satisfied by either the use of assets classified as current in the same
balance sheet, or the creation of other current liabilities, or those
expected to be satisfied within a relatively short period of time,
usually one year.
(i) Financial Statement means the documents submitted to the
Corporation by a private entity which portray the financial information
of the entity.
[[Page 33]]
The financial statement must be prepared in accordance with Generally
Accepted Accounting Principles (GAAP) and reflect the financial position
in the Statement of Financial Condition or Balance Sheet; and the result
of operations in the Statement of Profit and Loss or Income Statement.
(j) Processing representative means a person or organization
designated by the Contractor to be responsible for data entry and
electronic transmission of data contained on crop insurance documents.
(k) Sales means new applications and renewals of FCIC policies.
(l) Suspended Data Notice means a notification of a temporary stop
or delay in the processing of data transmitted to the Corporation by the
Contractor because the same is incomplete, non-processable, obsolete, or
erroneous.
(m) 3780 protocol--means the data communications protocol (standard)
that is a binary synchronous communications (BSC), International
Business Systems (IBM)-defined, byte controlled communications protocol,
using control characters and synchronized transmission of binary coded
data.
Sec. 400.203 Financial statement and certification.
(a) An entity desiring to become or continue as a contractor shall
submit to the Corporation a financial statement which is as of a date
not more than eighteen (18) months prior to the date of submission.
(b) The financial statement submitted shall be audited by a CPA (CPA
Audit); or if a CPA audited financial statement is not available, the
statement submitted to the Corporation must be accompanied by a
certification of:
(1) The owner, if the business entity is a sole proprietorship; or
(2) At least one of the general partners, if the business entity is
a partnership; or
(3) The Chief Executive Officer and Treasurer, if the business
entity is a Corporation, that said statement fairly represents the
financial condition of the entity on the date of such certification to
the Corporation. If the financial statement as certified by the Chief
Executive Officer and Treasurer, partner, or owner is submitted, a CPA
audited financial statement must be submitted if subsequently available.
Sec. 400.204 Notification of deviation from standards.
A Contractor shall advise the Corporation immediately if the
Contractor deviates from the requirements of these standards. The
Corporation may require the Contractor to show compliance with these
standards during the contract year if the Corporation determines that
such submission is necessary. If the Corporation determines that the
deviation is temporary, the Corporation may grant a temporary waiver
pending compliance within a specified period of time. A waiver of any
provision of these standards will not be granted to an applicant for a
contract.
Sec. 400.205 Denial or termination of contract and administrative
reassignment of business.
Non-compliance with these standards will result in:
(a) The denial of a Contract; or
(b) Termination of an existing Contract.
In the event of denial or termination of the Contract, all crop
insurance policies of the Corporation sold by the Contractor and all
business pertaining thereto may be assumed by the Corporation and may be
administratively reassigned by the Corporation to another Contractor.
Sec. 400.206 Financial qualifications for acceptability.
The financial statement of an entity must show total allowable
assets in excess of liabilities and the ability of the entity to meet
current liabilities by the use of current assets.
Sec. 400.207 Representative licensing and certification.
(a) A Contractor must maintain twenty-five (25) licensed and
certified Contractor Representatives.
(b) A Contractor's Representative who solicits, sells and services
FCIC policies or represents the Contractor in solicitation, sales or
service of such policies must hold a license as issued by the State or
States in which the
[[Page 34]]
policies are issued, which license authorizes the sales of insurance in
any one or more of the following lines:
(1) Multiple peril crop insurance;
(2) Crop hail insurance;
(3) Casualty insurance;
(4) Property insurance;
(5) Liability insurance; or
(6) Fire insurance and allied lines.
The Contractor must submit evidence, satisfactory to the
Corporation, verifying the type of State license held by each
Representative and the date of expiration of each license.
(c) A Contractor's Representative must have achieved certification
by the Corporation for each crop upon which the Representative sells and
services insurance.
Sec. 400.208 Term of the contract.
(a) The term of the Contract shall commence on July 1 or when
signed. The contract will continue from year to year with an annual
renewal date of July 1 for each succeeding year unless the Corporation
or the Contractor gives at least ninety (90) days advance notice in
writing to the other party that the contract is not to be renewed. Any
breach of the contract, or failure to comply with these Standards, by
the Contractor, may result in termination of the contract by the
Corporation upon written notice of termination to the Contractor. That
termination will be effective thirty (30) days after mailing of the
notice and termination to the Contractor.
(b) A Contractor who elects to continue under the Contract for a
subsequent year must, prior to the month of June, submit a completed
Plan of Operation which includes the Certifications as required by Sec.
400.203 of this subpart. The Contractor may not perform under the
contract until the Plan of Operation is approved by the Corporation.
Sec. 400.209 Electronic transmission and receiving system.
Any Contractor under the Contract is required to:
(a) Adopt a plan for the purpose of transmitting and receiving
electronically, information to and from the Corporation concerning the
original executed crop insurance documents;
(b) Maintain an electronic system which must be tested and approved
by the Corporation;
(c) Maintain Corporation approval of the electronic system as a
condition to the electronic transmission and reception of data by the
Contractor;
(d) Utilize the Corporation approved automated data processing and
electronic data transmission capabilities to process crop insurance
documents as required herein; and
(e) Establish and maintain the electronic equipment and computer
software program capability to:
(1) Receive and store actuarial data electronically via
telecommunications utilizing 3780 protocol and utilizing a BELL 208B or
compatible modem at 4800 bits per second (bps);
(2) Enter and store information from original crop insurance
documents into electronic format;
(3) Verify electronically stored information recorded from crop
insurance documents with electronically stored actuarial information;
(4) Compute and print the data elements in the Summary of
Protection;
(5) Transmit crop insurance data electronically, via 3780 protocol
utilizing a BELL 208B or compatible modem at 4800 bps;
(6) Receive electronic acknowledgements, error messages, and other
data via 3780 protocol utilizing a BELL 208B or compatible modem at 4800
bps, and relate error messages to original crop insurance documents; and
(7) Store backup data and physical documents.
(The Corporation may approve other compatible specifications if
accepted by the Corporation and if requested by the Contractor)
Sec. 400.210 [Reserved]
Subpart N [Reserved]
Subpart O_Non-Standard Underwriting Classification System Regulations
for the 1991 and Succeeding Crop Years
Authority: 7 U.S.C. 1506(l), 1506(p).
Source: 55 FR 32595, Aug. 10, 1990, unless otherwise noted.
[[Page 35]]
Sec. 400.301 Basis, purpose, and applicability.
The regulations contained in this subpart are issued pursuant to the
Federal Crop Insurance Act, as amended (7 U.S.C. 1501 et seq.), to
prescribe the procedures for nonstandard determinations and the
assignment of assigned yields or premium rates in conformance with the
intent of section 508 of the Act (7 U.S.C. 1508). These regulations are
applicable to all policies of insurance insured or reinsured by the
Corporation under the Act and on those policies where the insurance
coverage or indemnities are based on determinations applicable to the
individual insured. These regulations will not be applicable to any
policy where the amount of coverage or indemnities are based on the
experience of the area.
[62 FR 22876, Apr. 28, 1997]
Sec. 400.302 Definitions.
Act--means Federal Crop Insurance Act as amended (7 U.S.C. 1501 et
seq.).
Actively engaged in farming means a person who, in return for a
share of profits and losses, makes a contribution to the production of
an insurable crop in the form of capital, equipment, land, personal
labor, or personal management.
Actual Yield--means total harvested production of a crop divided by
the number of acres on which the crop was planted. For insured acres,
actual yield is the total production to count as defined in the
insurance policy, divided by insured acres.
Assigned yield--means units of crop production per acre
administratively assigned by the Corporation for the purpose of
determining insurance coverage.
Corporation--means the Federal Crop Insurance Corporation.
Cumulative earned premium rate--is the total premium earned for all
years in the base period, divided by the total liability for all years
in the base period with the result expressed as a percentage.
Cumulative loss ratio--means the ratio of total indemnities to total
earned premiums during the base period expressed as a decimal.
Earned premium means premium earned (both the amount subsidized and
the amount paid by the producer, but excluding any amount of the subsidy
attributed to the operating and administrative expenses of the insurance
provider) for a crop under a policy insured or reinsured by the
Corporation.
Earned premium rate--means premium earned divided by liability and
expressed as a percentage.
Entity--means a person as defined in this subpart other than an
individual.
Indemnified loss means a loss applicable for the policy for any year
during the NCS base period for which the total indemnity exceeds the
total earned premium. If the person has insurance for the crop in more
than one county for any crop year, indemnities and premiums will be
accumulated for all counties for each crop year to determine an
indemnified loss.
Insurance experience means earned premiums, indemnities paid (but
not including replant payments), and other data for the crop (after
applicable adjustments), resulting from all of the insured's crop
insurance policies insured or reinsured by the Corporation for one or
more crop years and will include all information from all counties in
which the person was insured.
Loss ratio--means the ratio of indemnity to earned premium expressed
as a decimal.
NCS means nonstandard classification system.
NCS base period means the 10 consecutive crop years (as defined in
the crop policy) ending 2 crop years prior to the crop year in which the
NCS classification becomes effective for all crops, except those
specified on the Special Provisions. For these excepted crops, the NCS
base period means the 10 consecutive crop years ending 3 crop years
prior to the crop year in which the NCS classification becomes
effective. For example: An NCS classification effective for the 1996
crop year against a producer of citrus production in Arizona,
California, and Texas, or sugarcane would have a NCS base period that
includes the 1984 through 1993 crop years. An NCS classification
effective for the 1996 crop year against a producer of all other crops
would have a
[[Page 36]]
NCS base period that includes the 1985 through 1994 crop years.
Person--means an individual, partnership, association, corporation,
estate, trust, or other legal entity, and whenever applicable, a State
or a political subdivision, or agency of a state.
Substantial beneficial interest--means an interest of 10 percent or
more. In determining whether such an interest equals at least 10
percent, all interests which are owned directly or indirectly through
such means as ownership of shares in a corporation which owns the
interest will be taken into consideration.
[55 FR 32595, Aug. 10, 1990, as amended at 62 FR 22876, Apr. 28, 1997]
Sec. 400.303 Initial selection criteria.
(a) Nonstandard classification procedures in this subpart initially
apply when all of the following insurance experience criteria (including
any applicable adjustment in Sec. 400.303(d)) for the crop have been
met:
(1) Three (3) or more indemnified losses during the NCS base period;
(2) Cumulative indemnities in the NCS base period that exceed
cumulative premiums during the same period by at least $500;
(3) The result of dividing the number of indemnified losses during
the NCS base period by the number of years premium is earned for that
period equals .30 or greater; and
(4) Either of the following apply:
(i) The natural logarithm of the cumulative earned premium rate
multiplied by the square root of the cumulative loss ratio equals 2.00
or greater; or
(ii) Five (5) or more indemnified losses have occurred during the
NCS base period and the cumulative loss ratio equals or exceeds 1.50.
(b) The minimum standards provided in paragraphs (a) (2), (3), and
(4) of this section may be increased in a specific county if that
county's overall insurance experience for the crop is substantially
different from the insurance experience for which the criteria was
determined. The increased standard will apply until the conditions
requiring the increase no longer apply. Any change in the standards will
be contained in the Special Provisions for the crop.
(c) Selection criteria may be applied on the basis of insurance
experience of a person, insured acreage, or the combination of both.
(1) Insurance experience of a person will include:
(i) Insurance experience of the person;
(ii) Insurance experience of other insured entitites in which the
person had substantial beneficial interest if the person was actively
engaged in farming of the insured crop by virtue of the person's
interest in those insured entities;
(iii) Insurance experience of a spouse and minor children if the
person is an individual and the spouse and minor children are considered
the same as the individual under Sec. 400.306.
(2) Insurance experience of insured acreage includes all insurance
experience during the base period resulting from the production of the
insured crop on the acreage.
(3) Where insurance experience is based on a combination of person
and insured acreage, the insurance experience will include the
experience of the person as defined in paragraph (b) of this section (1)
only on the specific insured acreage during the base period.
(d) Insurance experience for the crop will be adjusted, by county
and crop year, to discount the effect of indemnities caused by
widespread adverse growing conditions. Adjustments are determined as
follows:
(1) Determine the average yield for the county using the annual
county crop yields for the previous 20 crop years, unless such data is
not available;
(2) Determine the normal variability in the average yield for the
county, expressed as the standard deviation;
(3) Subtract the result of Sec. 400.303(d)(2) from Sec.
400.303(d)(1);
(4) Divide the annual crop yield for the county for each crop year
in the NCS base period by the result of Sec. 400.303(d)(3), the result
of which may not exceed 1.0;
(5) Subtract the result of Sec. 400.303(d)(4) for each crop year
from 1.0;
[[Page 37]]
(6) Multiply the result of Sec. 400.303(d)(5) by the liability for
the crop year; and
(7) Subtract the result of Sec. 400.303(d)(6) from any indemnity
for that crop year.
(e) FCIC may substitute the crop yields of a comparable crop in
determining Sec. 400.303(d) (1) and (2), or may adjust the average
yield or the measurement of normal variability for the county crop, or
any combination thereof, to account for trends or unusual variations in
production of the county crop or if the availability of yield and loss
data for the county crop is limited. Information about how these
determinations are made is available by submitting a request to the FCIC
Regional Service Office for the producer's area. Alternate methods of
determining the effects of adverse growing conditions on insurance
experience may be implemented by FCIC if allowed in the Special
Provisions.
[55 FR 32595, Aug. 10, 1990, as amended at 62 FR 22876, Apr. 28, 1997]
Sec. 400.304 Nonstandard Classification determinations.
(a) Nonstandard Classification determinations can affect a change in
assigned yields, premium rates, or both from those otherwise prescribed
by the insurance actuarial tables.
(b) Changes of assigned yields based on insurance experience of
insured acreage (or of a person on specific insured acreage) will be
based on the simple average of available actual yields from the insured
acreage during the base period.
(c) Changes of assigned yields based on insurance experience of a
person without regard to any specific insured acreage will be determined
by an assigned yield factor calculated by multiplying excess loss cost
ratio by loss frequency and subtracting that product from 1.00 where:
(1) Excess loss cost ratio is total indemnities divided by total
liabilities for all years of insurance experience in the base period and
the result of which is then reduced by the cumulative earned premium
rate, expressed as a decimal, and
(2) Loss frequency is the number of crop years in which an indemnity
was paid divided by the number of crop years in which premiums were
earned during the base period.
(d) Changes of premium rates will be made to reflect premium rates
that would have resulted in insurance experience during the base period
with a loss ratio of 1.00 but:
(1) A higher loss ratio than 1.00 may be used for premium rate
determinations provided that the higher loss ratio is applied uniformly
in a county; and
(2) If a Nonstandard Classification change has been made to current
assigned yields, insurance experience during the base period will be
adjusted to reflect the affects of changed assigned yields before
changes of premium rates are calculated based on that experience.
(e) Once selection criteria have been met in any year, Nonstandard
Classification adjustments will be made from year to year until no
further changes are necessary in assigned yields or premium rates under
the conditions set forth in Sec. 400.304(f). In determining whether
further changes are necessary, the eligibility criteria will be
recomputed each subsequent year using the premium rates and yields which
would have been applicable had this part not been in effect.
(f) Nonstandard Classification changes will not be made that:
(1) Increase assigned yields or decrease premium rates from those
otherwise assigned by the actuarial tables, or
(2) Result in less than a 10 percent decrease in assigned yields or
less than a 10 percent increase in premium rates from those otherwise
assigned by the actuarial tables.
Sec. 400.305 Assignment of Nonstandard Classifications.
(a) Assignment of a Nonstandard Classification of assigned yields,
assigned yield factors, or premium rates shall be made on forms approved
by the Corporation and included in the actuarial tables for the county.
(b) Nonstandard classification assignment will be made each year,
for the year identified on the assignment forms, and are not subject to
change under the provisions of this subpart by
[[Page 38]]
the Corporation for that year when included in the actuarial tables for
the county, except as a result of a request for reconsideration as
provided in section 400.309, or as the result of appeals under 7 CFR
part 11.
(c) A nonstandard classification may be assigned to identified
insurable acreage; a person; or to a combination of person and
identified acreage for a crop or crop practice, type, variety, or crop
option or amendment whereby:
(1) Classifications assigned to identified insurable acreage apply
to all acres of the insured crop grown on the identified acreage;
(2) Classifications assigned to a person apply to all insurable
acres of the insured crop on which the person and any entity in which
the person has substantial beneficial interest is actively engaged in
farming; and
(3) Classifications assigned to a combination of a person and
identified insurable acreage will only apply to those acres of the
insured crop grown on the identified acreage on which the named person
is actively engaged in producing such crop.
[55 FR 32595, Aug. 10, 1990, as amended at 62 FR 22877, Apr. 28, 1997]
Sec. 400.306 Spouses and minor children.
(a) The spouse and minor children of an individual are considered to
be the same as the individual for purposes of this subpart except that:
(1) The spouse who was actively engaged in farming in a separate
farming operation prior to their marriage will be a separate person with
respect to that separate farming operation so long as that operation
remains separate and distinct from any farming operation conducted by
the other spouse;
(2) A minor child who is actively engaged in farming in a separate
farming operation will be a separate person with respect to that
separate farming operation if:
(i) The parent or other entity in which the parent has a substantial
beneficial interest does not have any interest in the minor's separate
farming operation or in any production from such operation;
(ii) The minor has established and maintains a separate household
from the parent;
(iii) The minor personally carries out the farming activities with
respect to the minor's farming operation; and
(iv) The minor establishes separate accounting and recordkeeping for
the minor's farming operation.
(b) An individual shall be considered to be a minor until the age of
18 is reached. Court proceedings conferring majority on an individual
under 18 years of age will not change such individual's status as a
minor.
Sec. 400.307 Discontinuance of participation.
If the person has discontinued participation in the crop insurance
program, the person will still be included on the NCS list in the county
until the person has discontinued participation as a policyholder or a
person with a substantial beneficial interest in a policyholder for at
least 10 consecutive crop years. The most recent nonstandard
classification assigned will be continued from year to year until
participation has been renewed for at least one crop year and at least
three years of insurance experience have occurred in the current base
period. A nonstandard classification will no longer be applicable to the
person or the person on identified acreage if the Corporation determines
the person is deceased.
[62 FR 22877, Apr. 28, 1997]
Sec. 400.308 Notice of Nonstandard Classification.
(a) The Corporation will give written notice to all persons to whom
a Nonstandard Classification will be assigned. The notice will give the
Nonstandard Classification and the person's rights and responsibilities
according to this subpart.
(b) The person, upon receiving notice from the Corporation, will be
responsible for giving notice of the Nonstandard Classification to any
other person with an insurable interest affected by the classification.
The person will give notice to any other affected person:
(1) Prior to the sales closing date if the other affected person has
an established insurable interest at the time the classified person is
notified by the Corporation; or
[[Page 39]]
(2) Prior to the Classified person's establishing an insurable
interest of another person that will be affected by the classification.
Sec. 400.309 Requests for reconsideration.
(a) Any person to be assigned a nonstandard classification under
this subpart will be notified of and allowed not less that 30 days from
the date notice is received to request reconsideration before the
nonstandard classification becomes effective. The request will be
considered to have been made when received, in writing, by the
Corporation.
(b) Upon receipt of a timely request for reconsideration from the
person to whom the classification will be assigned, the Corporation
will:
(1) Review all information supplied by, and respond to all questions
raised by the individual, or
(2) In the absence of information and questions, review insurance
experience and determinations for compliance with this subpart and
report review results to the individual requesting reconsideration.
(c) Upon review of a request for reconsideration, the classification
to be assigned will be corrected for:
(1) Errors and omissions in insurance experience;
(2) Incorrect calculations under procedures in this subpart, and
(3) Typographical errors.
(d) If the review finds no cause for change, the classification will
be assigned and placed on file in the actuarial tables for the county.
(e) Any person not satisfied by a determination of the Corporation
upon reconsideration may further appeal under the provisions of 7 CFR
part 11.
[55 FR 32595, Aug. 10, 1990, as amended at 62 FR 22877, Apr. 28, 1997]
Subpart P_Preemption of State Laws and Regulations
Authority: 7 U.S.C. 1506, 1516.
Source: 55 FR 23069, June 6, 1990, unless otherwise noted.
Sec. 400.351 Basis and applicability.
The regulations contained in this subpart are issued pursuant to the
Federal Crop Insurance Act, as amended (7 U.S.C. 1501 et seq.) (the
Act), to prescribe the procedures for Federal preemption of State laws
and regulations not consistent with the purpose, intent, or authority of
the Act. These regulations are applicable to all policies of insurance,
insured or reinsured by the Corporation, contracts, agreements, or
actions authorized by the Act and entered into or issued by FCIC.
Sec. 400.352 State and local laws and regulations preempted.
(a) No State or local governmental body or non-governmental body
shall have the authority to promulgate rules or regulations, pass laws,
or issue policies or decisions that directly or indirectly affect or
govern agreements, contracts, or actions authorized by this part unless
such authority is specifically authorized by this part or by the
Corporation.
(b) The following is a non-inclusive list of examples of actions
that State or local governmental entities or non-governmental entities
are specifically prohibited from taking against the Corporation or any
party that is acting pursuant to this part. Such entities may not:
(1) Impose or enforce liens, garnishments, or other similar actions
against proceeds obtained, or payments issued in accordance with the
Federal Crop Insurance Act, these regulations, or contracts or
agreements entered into pursuant to these regulations;
(2) Tax premiums associated with policies issued hereunder;
(3) Exercise approval authority over policies issued;
(4) Levy fines, judgments, punitive damages, compensatory damages,
or judgments for attorney fees or other costs against companies,
employees of companies including agents and loss adjustors, or Federal
employees arising out of actions or inactions on the part of such
individuals and entities authorized or required under the Federal Crop
Insurance Act, the regulations, any contract or agreement authorized by
the Federal Crop Insurance Act or by regulations, or procedures issued
by the Corporation (Nothing herein precludes such damages being imposed
against the company if a determination is obtained from FCIC that the
[[Page 40]]
company, its employee, agent or loss adjuster failed to comply with the
terms of the policy or procedures issued by FCIC and such failure
resulted in the insured receiving a payment in an amount that is less
than the amount to which the insured was entitled); or
(5) Assess any tax, fee, or amount for the funding or maintenance of
any State or local insolvency pool or other similar fund.
The preceding list does not limit the scope or meaning of paragraph
(a) of this section.
[55 FR 23069, June 6, 1990, as amended at 69 FR 48730, Aug. 10, 2004]
Subpart Q_General Administrative Regulations; Collection and Storage of
Social Security Account Numbers and Employer Identification Numbers
Authority: 7 U.S.C. 1506(l), 1506(p).
Source: 57 FR 46297, Oct. 8, 1992, unless otherwise noted.
Sec. 400.401 Basis and purpose and applicability.
(a) The regulations contained in this subpart are issued pursuant to
the Act to prescribe procedures for the collection, use, and
confidentiality of Social Security Numbers (SSN) and Employer
Identification Numbers (EIN) and related records.
(b) These regulations are applicable to:
(1) All holders of crop insurance policies issued by FCIC under the
Act and sold and serviced by local FSA offices.
(2) All holders of crop insurance policies sold by insurance
providers and all insurance providers, their contractors and
subcontractors, including past and present officers and employees of
such companies, their contractors and subcontractors.
(3) Any agent, general agent, or company, or any past or present
officer, employee, contractor or subcontractor of such agent, general
agent, or company under contract to FCIC or an insurance provider for
loss adjustment or any other purpose related to the crop insurance
programs insured or reinsured by FCIC; and
(4) All past and present officers, employees, elected officials,
contractors, and subcontractors of FCIC and FSA.
[57 FR 46297, Oct. 8, 1992, as amended at 62 FR 28608, May 27, 1997]
Sec. 400.402 Definitions.
Act--The Federal Crop Insurance Act, as amended (7 U.S.C. 1501 et
seq.).
Applicant--A person who has submitted an application for crop
insurance coverage under the Act.
Authorized person--Any current or past officer, employee, elected
official, general agent, contractor, or loss adjuster of FCIC, the
insurance provider, or any other government agency whose duties require
access to administer the Act.
Disposition of records--The act of removing and disposing of records
containing a participant's SSN or EIN by FCIC, or the insurance
provider.
FCIC--The Federal Crop Insurance Corporation of the United States
Department of Agriculture or any successor agency.
FSA--The Farm Service Agency of the United States Department of
Agriculture, or a successor agency.
Insurance provider--A private insurance company approved by FCIC, or
a local FSA office providing crop insurance coverage to producers
participating in any program administered under the Act.
Past officers and employees--Any officer or employee of FCIC or the
insurance provider who leaves the employ of FCIC or the insurance
provider subsequent to the effective date of this rule.
Person--An individual, partnership, association, corporation,
estate, trust, or other legal entity, and whenever applicable, a state,
political subdivision, or an agency of a state.
Policyholder--An applicant whose application for insurance under the
crop insurance program has been accepted by FCIC or the insurance
provider.
Retrieval of records--Retrieval of a person's records by that
person's SSN or EIN, or name.
Safeguards--Methods of security to be employed by FCIC or the
insurance provider to protect a participant's SSN or EIN from unlawful
disclosure and access.
[[Page 41]]
Storage--The secured storing of records kept by FCIC or the
insurance provider on computer disks or drives, computer printouts,
magnetic tape, index cards, microfiche, microfilm, etc.
Substantial beneficial interest--Any person having an interest of at
least 10 percent in the applicant or policyholder.
System of records--Records established and maintained by FCIC or the
insurance provider containing SSN or EIN data, name, address, city and
State, applicable policy numbers, and other information related to
multiple peril crop insurance policies as required by FCIC, from which
information is retrieved by a personal identifier including, but not
limited to the SSN, EIN, or name.
[62 FR 28608, May 27, 1997]
Sec. 400.403 Required system of records.
Insurance providers are required to implement a system of records
for obtaining, using, and storing documents containing SSN or EIN data
before they accept or receive any applications for insurance. This data
should include: name; address; city and state; SSN or EIN; and policy
numbers which have been used by FCIC or the insurance provider.
[62 FR 28608, May 27, 1997]
Sec. 400.404 Policyholder responsibilities.
(a) The policyholder or applicant for crop insurance must provide a
correct SSN or EIN to FCIC or the insurance provider to be eligible for
insurance. The SSN or EIN will be used by FCIC and the insurance
provider in:
(1) Determining the correct parties to the agreement or contract;
(2) Collecting premiums or other amounts due FCIC or the insurance
provider;
(3) Determining the amount of indemnities;
(4) Establishing actuarial data on an individual policyholder basis;
and
(5) Determining eligibility for crop insurance program participation
or other United States Department of Agriculture benefits.
(b) If the policyholder or applicant for crop insurance does not
provide the correct SSN or EIN on the application and other forms where
such SSN or EIN is required, FCIC or the reinsured company shall reject
the application.
(c) The policyholder or applicant is required to provide to FCIC or
the insurance provider, the name and SSN or EIN of any individual or
other entity:
(1) holding or acquiring a substantial beneficial interest in such
policyholder or applicant; or
(2) having any interest in the policyholder or applicant and
receiving separate benefits under another United States Department of
Agriculture program as a direct result of such interest.
(d) If a policyholder or applicant is using an EIN for a policy in
an individual person's name, the SSN of the policyholder or applicant
must also be provided.
[62 FR 28608, May 27, 1997]
Sec. 400.405 Agent and loss adjuster responsibilities.
(a) The agent or loss adjuster shall provide his or her correct SSN
to FCIC or the insurance provider, whichever is applicable, to be
eligible to participate in the crop insurance program. The SSN will be
used by FCIC and the insurance provider in establishing a database for
the purposes of:
(1) Identifying agents and loss adjusters on an individual basis;
(2) Evaluating agents and loss adjusters to determine level of
performance;
(3) Determining eligibility for program participation; and
(4) Collection of any amount which may be owed by the agent and loss
adjuster to the United States.
(b) If the loss adjuster contracting with FCIC to participate in the
crop insurance program does not provide his or her correct SSN on forms
or contracts where such SSN is required, the loss adjuster's contract
will be cancelled effective on the date of refusal and the loss adjuster
will be subject to suspension and debarment in accordance with the
suspension and debarment regulations of the United States Department of
Agriculture.
(c) If the agent or loss adjuster contracting with an insurance
provider, who is also a private insurance company, to participate in the
crop insurance program does not provide his or her correct SSN on forms
or contracts
[[Page 42]]
where such SSN is required, the premium subsidy payable for
administrative and operating expenses under the Standard Reinsurance
Agreement, or any other reinsurance agreement, will not be paid on those
policies lacking the correct SSN.
[62 FR 28609, May 27, 1997]
Sec. 400.406 Insurance provider responsibilities.
The insurance provider is required to collect and record the SSN or
EIN on each application or on any other form required by FCIC.
[62 FR 28609, May 27, 1997]
Sec. 400.407 Restricted access.
The Manager, other officer, or employee of FCIC or an authorized
person may have access to the SSNs and EINs obtained pursuant to this
subpart, only for the purpose of establishing and maintaining a system
of records necessary for the effective administration of the Act.
[62 FR 28609, May 27, 1997]
Sec. 400.408 Safeguards and storage.
Records must be maintained in secured storage with proper safeguards
sufficient to enforce the restricted access provisions of this subpart.
[62 FR 28609, May 27, 1997]
Sec. 400.409 Unauthorized disclosure.
Anyone having access to the records identifying a participant's SSN
or EIN will abide by the provisions of section 205(c)(2)(C) of the
Social Security Act (42 U.S.C. 405(c)(2)(C), and section 6109(f),
Internal Revenue Code of 1986 (26 U.S.C. 6109(f) and the Privacy Act of
1974 (5 U.S.C. 552a). All records are confidential, and are not to be
disclosed to unauthorized personnel.
[57 FR 46297, Oct. 8, 1992. Redesignated at 62 FR 28608, May 27, 1997]
Sec. 400.410 Penalties.
Unauthorized disclosure of SSN's or EIN's by any person may subject
that person, and the person soliciting the unauthorized disclosure, to
civil or criminal sanctions imposed under various Federal statutes,
including 26 U.S.C. 7613, 5 U.S.C. 552a, and 42 U.S.C. 408.
[57 FR 46297, Oct. 8, 1992. Redesignated at 62 FR 28608, May 27, 1997]
Sec. 400.411 Obtaining personal records.
Policyholders, agents, and loss adjusters in the crop insurance
program will be able to review and correct their records as provided by
the Privacy Act. Records may be requested by:
(a) Mailing a signed written request to the headquarters office of
FCIC; the FCIC Regional Service Office, or the insurance provider; or
(b) Making a personal visit to the above mentioned establishments
and showing valid identification.
[57 FR 46297, Oct. 8, 1992. Redesignated and amended at 62 FR 28608,
28609, May 27, 1997]
Sec. 400.412 Record retention.
(a) FCIC or the insurance provider will retain all records of
policyholders for a period of not less than 3 years from the date of
final action on a policy for the crop year, unless further maintenance
of specific records is requested by FCIC. Final actions on insurance
policies include conclusion of insurance events, such as the latest of
termination of the policy, completion of loss adjustment, or
satisfaction of claim.
(b) The statute of limitations for FCIC contract claims may permit
litigation to be instituted after the period of record retention.
Destruction of records prior to the expiration of the statute of
limitations will not provide a defense to any action by FCIC against any
private insurance company.
[62 FR 28609, May 27, 1997]
Sec. 400.413 [Reserved]
Subpart R_Sanctions
Authority: 7 U.S.C. 1506(l).
Source: 58 FR 53110, Oct. 14, 1993, unless otherwise noted.
Sec. 400.451 General.
(a) The Federal Crop Insurance Corporation (FCIC) has implemented a
system of sanctions to prevent waste,
[[Page 43]]
fraud, and abuse within its programs and insurance delivery systems.
Such sanctions include civil penalties and disqualification from the
crop insurance program under the Federal Crop Insurance Act, 7 U.S.C.
1506(m); government wide debarment and suspension; and civil penalties
and assessments under the Program Fraud Civil Remedies Act, 31 U.S.C.
3801--31 U.S.C. 3812.
(b) The provisions of this subpart apply to all contracts and
agreements to which FCIC is a party unless otherwise specifically
provided for in this subpart, including those in which FCIC provides
administrative expense reimbursement, premium subsidy, or reinsurance
benefits.
(c) The provisions of this subpart are in addition to any other
sanctions specifically provided in applicable contracts and agreements.
(d) This subpart is applicable to any act or omission by any
affected party after October 14, 1993.
Sec. 400.452 Definitions.
For purposes of this subpart, a person means an individual,
partnership, association, corporation, estate, trust, or other business
enterprise or legal entity, and wherever applicable, a state, a
political subdivision of a state, or any agency thereof.
Sec. 400.453 Exhaustion of administrative remedies.
All administrative remedies contained herein or incorporated herein
by reference must be exhausted before Judicial Review in the United
States Courts may be sought, unless review is specifically required by
statute.
Sec. 400.454 Civil penalties.
(a) Any person who willfully and intentionally provides any
materially false or inaccurate information to FCIC or to any approved
insurance provider reinsured by FCIC with respect to an insurance plan
or policy issued under the authority of the Federal Crop Insurance Act,
as amended, (7 U.S.C. 1501 et seq.) may be subject to a civil fine of up
to an amount specified in Sec. 3.91(b)(7) of this title and
disqualification from participation in:
(1) The catastrophic risk protection plan of insurance and the
noninsured crop disaster assistance program for a period not to exceed
two (2) years; or
(2) Any plan of insurance providing protection in excess of that
provided under the catastrophic risk protection plan of insurance for a
period not to exceed ten (10) years.
(b) FCIC may make the payment of a civil penalty under this section
a prior condition for the issuance, renewal, restoration, or continuing
validity of any crop insurance policy or other approval.
(c) FCIC may compromise, modify, settle, collect, or remit with or
without conditions, any civil penalty which is subject to imposition or
which has been imposed under this section whenever it considers it to be
appropriate or advisable.
(d) If a director, officer, or agent of a corporation provides false
or inaccurate information, they may be separately subject to the fine
specified in paragraph (a) of this section without regard to any
penalties to which the corporation may be subject.
(e) The liability of any person for any penalty under this subpart
or any related charges arising in connection therewith shall be in
addition to any other liability of such person under any civil or
criminal fraud statute or any other statute or provision of law.
(f) Proceedings under this Sec. 400.454 will be in accordance with
subpart H of 7 CFR part 1, ``Rules of Practice Governing Formal
Adjudicatory Proceedings Instituted by the Secretary under Various
Statutes,'' by which the Manager, FCIC, shall initiate proceedings by
filing a complaint with the Hearing Clerk, United States Department of
Agriculture.
[58 FR 53110, Oct. 14, 1993, as amended at 60 FR 37323, July 20, 1995;
62 FR 40928, July 31, 1997]
Sec. 400.455 Governmentwide debarment and suspension (procurement).
(a) This section prescribes the terms and conditions under which
persons or business entities may be debarred or suspended by FCIC from
contracting with the Federal government.
(b) This section is in accordance with 48 CFR part 9, subpart 9.4
and 48 CFR
[[Page 44]]
part 409, subpart 409.4 and shall be applicable to all FCIC debarment
and suspension proceedings undertaken pursuant to the Federal
Acquisition Regulations, except that the authority to debar or suspend
is reserved to the Manager, FCIC, or the Manager's designee.
(c) Any individual or entity suspended or debarred under the
provisions of 48 CFR part 9, subpart 9.4 will not be eligible to
contract with FCIC or be employed by or contract with any insurance
company that sells or adjusts FCIC's crop insurance contracts or which
company's crop insurance contracts are reinsured by FCIC. FCIC may waive
this provision if it is satisfied that the insurance company has taken
sufficient action to insure that the suspended or debarred entity or
individual will not be involved, in any way, with FCIC or FCIC reinsured
crop insurance contracts.
Sec. 400.456 Governmentwide debarment and suspension (nonprocurement).
(a) This section prescribes the terms and conditions under which
individuals or entities may be debarred or suspended by FCIC from
participation in Federal assistance and benefits under Federal programs
and activities.
(b) This section, in accordance with 7 CFR part 3017, shall be
applicable to all FCIC debarment and suspension proceedings other than
those undertaken pursuant to the Federal Acquisition Regulations.
(c) Proceedings under this section are not applicable to
determinations of eligibility under the provisions of the crop insurance
contracts or determinations to be made under 7 CFR 400.454.
(d) The Manager, FCIC, shall be the debarring and suspending
official for all debarment or suspension proceedings undertaken by FCIC
under the provisions of 7 CFR part 3017.
Sec. 400.457 Program Fraud Civil Remedies Act.
(a) This section is in accordance with the Program Fraud Civil
Remedies Act of 1986 (31 U.S.C. 3801-U.S.C. 3831) which provides for
civil penalties and assessments against persons who make, submit, or
present, or cause to be made, submitted, or presented, false,
fictitious, or fraudulent claims or written statements to Federal
authorities or to their agents.
(b) Proceedings under this section will be in accordance with
subpart L of 7 CFR part 1, ``Procedures Related to Administrative
Hearings Under the Program Fraud Civil Remedies Act of 1986.''
(c) The Director, Appeals and Litigation Staff, FCIC, or the
Director's designee, is authorized to serve as Agency Fraud Claims
Officer for the purpose of implementing the requirements of this
section.
Sec. 400.458 Scheme or device.
(a) In addition to the penalties specified in this part, if a person
has knowingly adopted a material scheme or device to obtain catastrophic
risk protection, other plans of insurance coverage, or noninsured
assistance benefits to which the person is not entitled, has evaded the
provisions of the Federal Crop Insurance Act, or has acted with the
purpose of evading the provisions of the Federal Crop Insurance Act, the
person shall be ineligible to receive any and all benefits applicable to
any crop year for which the scheme or device was adopted.
(b) A scheme or device may include, but is not limited to, creating
or using another entity, or concealing or providing false information
with respect to your interest in the policyholder, to evade:
(1) Suspension, debarment, or disqualification from participation in
the program;
(2) The assignment of the nonstandard classification system; or
(3) Ineligibility for a delinquent debt owed to FCIC or the
insurance company.
[60 FR 37324, July 20, 1995]
Sec. 400.459 Indebtedness.
Any person who owes a debt to FCIC, or an approved insurance
provider, arising from any program administered under the Act, and that
debt is delinquent, will be ineligible to participate in all such
programs until the debt is paid in full or the person enters into an
agreement, acceptable to FCIC or the approved insurance provider, to
repay
[[Page 45]]
the debt. If the person provides adequate evidence to demonstrate that
the amount of debt is in dispute, the person's application will be
accepted or their insurance will remain in effect, but no indemnity
payment will be made, until the disputed issue is resolved between that
person and FCIC or the approved insurance provider through the available
appeal process.
[60 FR 51321, Oct. 2, 1995]
Sec. Sec. 400.460-400.500 [Reserved]
Subpart S [Reserved]
Subpart T_Federal Crop Insurance Reform, Insurance Implementation
Authority: 7 U.S.C. 1506(l) and 1506(p).
Source: 61 FR 42975, Aug. 20, 1996, unless otherwise noted.
Sec. 400.650 Purpose.
The Reform Act requires FCIC to implement a crop insurance program
that offers several levels of insurance coverage for producers. These
levels of protection include catastrophic risk protection, and
additional coverage insurance. This subpart provides notice of the
availability of these crop insurance options and establishes provisions
and requirements for implementation of the insurance provisions of the
Reform Act.
[61 FR 42975, Aug. 20, 1996, as amended at 68 FR 37721, June 25, 2003]
Sec. 400.651 Definitions.
Act. The Federal Crop Insurance Act, as amended (7 U.S.C. Sec. Sec.
1501 et seq.).
Additional coverage. A level of coverage greater than catastrophic
risk protection.
Administrative fee. An amount the producer must pay for
catastrophic, and additional coverage each crop year on a per crop and
county basis as specified in the Basic Provisions or the Catastrophic
Risk Protection Endorsement.
Approved insurance provider. A private insurance company, including
its agents, that has been approved and reinsured by FCIC to provide
insurance coverage to producers participating in the Federal crop
insurance program.
Approved yield. The actual production history (APH) yield,
calculated and approved by the verifier, used to determine the
production guarantee by summing the yearly actual, assigned, adjusted or
unadjusted transitional yields and dividing the sum by the number of
yields contained in the database, which will always contain at least
four yields. The database may contain up to 10 consecutive crop years of
actual or assigned yields. The approved yield may have yield adjustments
elected under applicable policy provisions, or other limitations
according to FCIC approved procedures applied when calculating the
approved yield.
Catastrophic risk protection. The minimum level of coverage offered
by FCIC which is required before a person may qualify for certain other
USDA program benefits unless the producer executes a waiver of any
eligibility for emergency crop loss assistance in connection with the
crop. For the 1995 through 1998 crop years, such coverage will offer
protection equal to fifty percent (50%) of the approved yield
indemnified at sixty percent (60%) of the expected market price, or a
comparable coverage as established by FCIC. For the 1999 and subsequent
crop years, such coverage will offer protection equal to fifty percent
(50%) of the approved yield indemnified at fifty-five percent (55%) of
the expected market price, or a comparable coverage as established by
FCIC.
Catastrophic Risk Protection Endorsement. The part of the crop
insurance policy that contains provisions of insurance that are specific
to catastrophic risk protection.
Crop of economic significance. A crop that has either contributed in
the previous crop year, or is expected to contribute in the current crop
year, ten percent (10%) or more of the total expected value of the
producer's share of all crops grown in the county. However, a crop will
not be considered a crop of economic significance if the expected
liability under the Catastrophic Risk Protection Endorsement is equal to
or less than the administrative fee required for the crop.
[[Page 46]]
Expected market price. (price election) The price per unit of
production (or other basis as determined by FCIC) anticipated during the
period the insured crop normally is marketed by producers. This price
will be set by FCIC before the sales closing date for the crop. The
expected market price may be less than the actual price paid by buyers
if such price typically includes remuneration for significant amounts of
post-production expenses such as conditioning, culling, sorting,
packing, etc.
FCIC. The Federal Crop Insurance Corporation, a wholly owned
Government Corporation within USDA.
FSA. The Farm Service Agency, an agency of the United States
Department of Agriculture or any successor agency.
Insurable interest. The value of the producer's interest in the crop
that is at risk from an insurable cause of loss during the insurance
period. The maximum indemnity payable to the producer may not exceed the
indemnity due on the producer's insurable interest at the time of loss.
Intended crop. A crop stated on the application as submitted on or
before the sales closing date for the crop which the producer intended
to plant in the crop year for which application is made.
Linkage requirement. The legal requirement that a producer must
obtain at least catastrophic risk protection coverage for any crop of
economic significance as a condition of receiving benefits for such crop
from certain other USDA programs in accordance with Sec. 400.655,
unless the producer executes a waiver of any eligibility for emergency
crop loss assistance in connection with the crop.
Person. An individual, partnership, association, corporation,
estate, trust, or other legal entity, and wherever applicable, a state
or a political subdivision or agency of a state.
Reform Act. The Federal Crop Insurance Reform Act of 1994, Public
Law 103-354.
Secretary. The Secretary of the United States Department of
Agriculture.
Substitute crop. An alternative crop whose sales closing date has
passed and that is planted on acreage that is prevented from being
planted to an intended crop or where an intended crop is planted and
fails.
Zero acreage report. An acreage report filed by the producer that
certifies that the producer does not have a share in the crop for that
crop year.
[61 FR 42975, Aug. 20, 1996, as amended at 63 FR 40634, July 30, 1998;
64 FR 40742, July 28, 1999; 68 FR 37721, June 25, 2003]
Sec. 400.652 Insurance availability.
(a) If sufficient actuarial data are available, FCIC will offer
catastrophic risk protection, and additional coverage plans of insurance
to indemnify persons for FCIC insured or reinsured crop loss due to loss
of yield or prevented planting, if the crop loss or prevented planting
is due to an insured cause of loss specified in the applicable crop
insurance policy.
(b) Catastrophic risk protection coverage may be offered through
approved insurance providers and through local offices of the Farm
Service Agency specified by the Secretary. Additional coverage will only
be offered through approved insurance providers unless there is not a
sufficient number of approved insurance providers that offer such
insurance within a service area.
(c) A person must obtain at least catastrophic risk protection for
the crop on all insurable acreage in the county in which the person has
a share on or before the sales closing date designated by FCIC for the
crop in the county in order to satisfy the linkage requirements unless
the producer executes a waiver of any eligibility for emergency crop
loss assistance in connection with the crop.
(d) For additional coverage, in areas where insurance is not
available for a particular agricultural commodity that is insurable
elsewhere, FCIC may enter into a written agreement with a person to
insure the commodity, provided that the person has actuarially sound
data relating to the production of the commodity that is acceptable to
FCIC and that such written agreement is specifically allowed by the crop
insurance regulations applicable to the crop.
(e) Failure to comply with all provisions of the policy constitutes
a breach
[[Page 47]]
of contract and may result in ineligibility for certain other farm
program benefits for that crop year and any benefit already received
must be refunded. If a producer breaches the insurance contract, the
execution of a waiver of eligibility for emergency crop loss assistance
will not be effective for the crop year in which the breech occurred.
[61 FR 42975, Aug. 20, 1996, as amended at 68 FR 37721, June 25, 2003]
Sec. 400.653 Determining crops of economic significance.
To be eligible for certain other program benefits under Sec.
400.655 the following conditions will apply with respect to crops of
economic significance if the producer does not execute a waiver of any
eligibility for emergency crop loss assistance in connection with the
crop.
(a) If a producer planted a crop of economic significance in the
preceding crop year, and does not intend to plant the same crop in the
present crop year, the producer does not have to obtain insurance
coverage or execute a waiver of any eligibility for emergency crop loss
assistance in connection with the crop in the present crop year to
comply with the linkage requirements. However, if the producer later
decides to plant that crop, the producer will be unable to obtain
insurance after the sales closing date and must execute a waiver of any
eligibility for emergency crop loss assistance in connection with the
crop to be eligible for benefits as specified in Sec. 400.655. Failure
to execute such a waiver will require the producer to refund any
benefits already received under a program specified in Sec. 400.655.
(b) The producer is initially responsible to determine the crops of
economic significance in the county. The insurance provider may assist
the producer in making these initial determinations. However, these
determinations will not be binding on the insurance provider. To
determine the percentage value of each crop:
(1) Multiply the acres planted to the crop times the producer's
share, times the approved yield, and times the price;
(2) Add the values of all crops grown by the producer (in the
county); and
(3) Divide the value of the specific crop by the result of paragraph
(b)(2).
(c) The producer may use the type of price, such as the current
local market price, futures price, established price, highest amount of
insurance, etc., for the price when calculating the value of each crop,
provided that the producer uses the same type of price for all crops in
the county.
(d) The producer may be required to justify the calculation and
provide adequate records to enable the insurance provider to verify
whether a crop is of economic significance.
[61 FR 42975, Aug. 20, 1996, as amended at 64 FR 40742, July 28, 1999]
Sec. 400.654 Application and acreage report.
(a) To participate in catastrophic risk protection, or additional
coverage plans of insurance, a producer must submit an application for
insurance on or before the applicable sales closing date.
(b) In order to remain eligible for certain farm programs, as
specified in Sec. 400.655, a producer must obtain at least catastrophic
risk protection on all crops of economic significance, if catastrophic
risk protection is available in the county, unless the producer executes
a waiver of any eligibility for emergency crop loss assistance in
connection with the crop.
(c) Notwithstanding the requirements of Sec. 400.654(a) that
applications for insurance be submitted on or before the applicable
sales closing date, FCIC may permit a producer to insure crops other
than those specified on the application under the following conditions:
(1) The producer must be unable to plant the intended crop or it is
not practical to replant a failed crop before the final planting date.
FCIC will take into consideration marketing windows when determining
whether it was not practical to replant.
(2) Conditions must exist to warrant allowing a producer to insure
crops other than the intended crop.
(3) The producer must submit an application for the substitute crop
on or before the acreage reporting date for the substitute crop and pay
any applicable administrative fee. A producer
[[Page 48]]
may not substitute a crop that the producer planted in the preceding
crop year unless that crop was listed on a timely filed application for
the current crop year.
(4) If the producer plants a substitute crop that is a crop of
economic significance, the producer must obtain CAT coverage, if
available, to comply with the linkage requirements specified in Sec.
400.655. The producer may not substitute a crop under this provision if
the producer has signed or intends to sign a waiver for emergency crop
loss assistance for the crop year.
(5) The substitute crop must be planted on or before the final
planting date or within the late planting period, if applicable, for the
substitute crop.
(6) Under no circumstances may a producer submit an application for
additional coverage after the sales closing date for the substitute
crop.
(d) For all coverages, including catastrophic risk protection, and
additional coverages, the producer must file a signed acreage report on
or before the acreage reporting date. Any person may sign any document
relative to crop insurance coverage on behalf of any other person
covered by such a policy, provided that the person has a properly
executed power of attorney or other legally sufficient document
authorizing such person to sign.
(e) Under catastrophic risk protection, unless the other person with
an insurable interest in the crop objects in writing prior to the
acreage reporting date and provides a signed acreage report on their own
behalf an operator may sign the acreage report for all other persons
with an insurable interest in the crop without a power of attorney. All
persons with an insurable interest in the crop, and for whom the
operator purports to sign and represent, are bound by the information
contained in that acreage report.
[61 FR 42975, Aug. 20, 1996, as amended at 64 FR 40742, July 28, 1999;
68 FR 37721, June 25, 2003]
Sec. 400.655 Eligibility for other program benefits.
The producer must obtain at least catastrophic coverage for each
crop of economic significance in the county in which the producer has an
insurable share, if insurance is available in the county for the crop,
unless the producer executes a waiver of any eligibility for emergency
crop loss assistance in connection with the crop, to be eligible for:
(a) Benefits under the Agricultural Market Transition Act;
(b) Loans or any other USDA provided farm credit, including:
guaranteed and direct farm ownership loans, operating loans, and
emergency loans under the Consolidated Farm and Rural Development Act
provided after October 13, 1994; and
(c) Benefits under the Conservation Reserve Program derived from any
new or amended application or contract executed after October 13, 1994.
[61 FR 42975, Aug. 20, 1996. Redesignated at 63 FR 40634, July 30, 1998]
Sec. Sec. 400.656-400.657 [Reserved]
Subpart U_Ineligibility for Programs Under the Federal Crop Insurance
Act
Authority: 7 U.S.C. 1506(1), 1506(p).
Source: 62 FR 42042, Aug. 5, 1997, unless otherwise noted.
Sec. 400.675 Purpose.
This rule prescribes conditions under which a person may be
determined to be ineligible to participate in any program administered
by FCIC under the Federal Crop Insurance Act, as amended. This rule also
establishes the criteria for reinstatement of eligibility.
Sec. 400.676 [Reserved]
Sec. 400.677 Definitions.
Act. The Federal Crop Insurance Act, as amended (7 U.S.C. 1501 et
seq.).
Actively engaged in farming. Means a person who, in return for a
share of profits and losses, makes a contribution to the production of
an insurable crop in the form of capital, equipment, land, personal
labor, or personal management.
Applicant. A person who has submitted an application for crop
insurance coverage under the Act.
Authorized person. Any current or past officer, employee, elected
official,
[[Page 49]]
general agent, agent, contractor, or loss adjuster of FCIC, the
insurance provider, or any other government agency whose duties require
access to the Ineligible Tracking System to administer the Act.
CAT. The catastrophic risk protection plan of insurance.
Controlled substance. Any prohibited drug-producing plants
including, but not limited to, cacti of the genus (lophophora), coca
bushes (erythroxylum coca), marijuana (cannabis sativa), opium poppies
(papaver somniferum), and other drug-producing plants, the planting and
harvesting of which is prohibited by Federal or state law.
Debt. An amount of money which has been determined by an appropriate
agency official to be owed, by any person, to FCIC or an insurance
provider under any program administered under the Act based on evidence
submitted by the insurance provider. The debt may have arisen from an
overpayment, premium or administrative fee nonpayment, interest,
penalties, or other causes.
Debtor. A person who owes a debt and that debt is delinquent.
Delinquent debt. Any debt owed to FCIC or the insurance provider,
that arises under any program administered under the authority of the
Act, that has not been paid by the termination date specified in the
applicable contract of insurance, or other due date for payment
contained in any other agreement or notification of indebtedness, or any
overdue debt owed to FCIC or the insurance provider which is the subject
of a scheduled installment payment agreement which the debtor has failed
to satisfy under the terms of such agreement. Such debt may include any
accrued interest, penalty, and administrative charges for which demand
for repayment has been made, or unpaid premium including any accrued
interest, penalty and administrative charges (7 CFR 400.116). A
delinquent debt does not include debts discharged in bankruptcy and
other debts which are legally barred from collection.
EIN. An Employer Identification Number as required under section
6109 of the Internal Revenue Code of 1986.
FCIC. The Federal Crop Insurance Corporation, a wholly owned
government corporation within the United States Department of
Agriculture.
FSA. The Farm Service Agency or a successor agency.
Ineligible person. A person who is denied participation in any
program administered by FCIC under the Act.
Insurance provider. A reinsured company or FSA providing crop
insurance coverage to producers participating in any Federal crop
insurance program administered under the Act.
Minor. Any person under 18 years of age. Court proceedings
conferring majority on an individual under 18 years of age will result
in such persons no longer being considered as a minor.
Person. An individual, partnership, association, corporation,
estate, trust, or other legal entity, and wherever applicable, a State,
political subdivision, or an agency of a State.
Policyholder. An applicant whose properly completed application for
insurance under the crop insurance program has been accepted by FCIC or
an insurance provider.
Reinsurance agreement. An agreement between two parties by which an
insurer cedes to a reinsurer certain liabilities arising from the
insurer's sale of insurance policies.
Reinsured company. A private insurance company having a Standard
Reinsurance Agreement, or other reinsurance agreement, with FCIC, whose
crop insurance policies are approved and reinsured by FCIC.
Scheduled installment payment agreement. An agreement between a
person and FCIC or the insurance provider to satisfy financial
obligations of the person under conditions which modify the terms of the
original debt.
Settlement. An agreement between a person and FCIC or the insurance
provider to resolve a dispute arising from a debt or other
administrative determination.
SSN. An individual's Social Security Number as required under
section 6109 of the Internal Revenue Code of 1986.
Standard Reinsurance Agreement (SRA). The primary reinsurance
agreement between the reinsured company and FCIC.
[[Page 50]]
Substantial beneficial interest. An interest held by any person of
at least 10 percent or more in the applicant or policyholder.
System of records. Records established and maintained by FCIC and
FSA containing SSN or EIN data, name, address, city and State,
applicable policy numbers, and other information related to Federal crop
programs as required by FCIC, from which information is retrieved by a
personal identifier including the SSN, EIN, name, or other unique
identifier of a person.
[62 FR 42042, Aug. 5, 1997, as amended at 63 FR 40631, July 30, 1998]
Sec. 400.678 Applicability.
This subpart applies to any program administered by FCIC under the
Act, including:
(a) The catastrophic risk protection plan of insurance;
(b) The limited and additional coverage plans of insurance as
authorized under sections 508(c) and 508(m) of the Act; and
(c) Private insurance products authorized under section 508(h) of
the Act and reinsured by FCIC.
Sec. 400.679 Criteria for ineligibility.
Any person may be determined to be ineligible to participate in any
program administered by FCIC under the authority of the Act, if the
person meets one or more of the following criteria:
(a) Has a delinquent debt on a crop insurance policy, issued or
reinsured by FCIC, or any delinquent debt due FCIC under the Act. Any
person with a delinquent debt owed to FCIC or to the insurance provider
shall be ineligible to participate in any program administered under the
authority of the Act. Such determinations will be in accordance with 7
CFR 400.459. The existence and delinquency of the debt must be
verifiable.
(b) Has violated the controlled substance (7 CFR part 718)
provisions of the Food Security Act of 1985, as amended. Any person who
violates the controlled substance provisions of the Food Security Act of
1985, as amended, shall be ineligible to participate in any program
administered under the Act.
(c) Has been disqualified under section 506(n) of the Act and 7 CFR
part 400, subpart R. Any person who is disqualified in any
administrative proceeding shall be ineligible to participate in any
program administered under the Act. Ineligibility determinations
resulting from administrative proceedings will not be stayed pending
review. However, reversal of the determination will date back to the
time of determination.
Sec. 400.680 Determination and notification of ineligibility.
(a) The insurance provider must send a written notice of the debt to
the person, including the time frame in which the debt must be paid, and
provide the person with a meaningful opportunity to contest the amount
or existence of the debt. After the insurance provider has evaluated the
person's response, if any, and determined that the debt is owed and
delinquent, the insurance provider should submit the documentation
establishing the existence and amount of the debt to FCIC, including any
response by the person.
(b) If an insurance provider or any other authorized person has
evidence that a person meets any other criteria set forth in Sec.
400.679, they must submit the evidence to FCIC.
(c) After FCIC verifies that the person has met one or more of the
criteria stated in Sec. 400.679, FCIC will issue a Notice of
Ineligibility and mail such notice to the person's last known address
and to the insurance provider.
(d) The Notice of Ineligibility will state the criteria upon which
the determination of ineligibility has been based, a brief statement of
the facts to support the determination, the time period of
ineligibility, and the persons right to an appeal of the ineligibility
determination.
(e) Within 30 days of receiving the Notice of Ineligibility, any
person receiving such a notice may appeal the determination of
ineligibility to the National Appeals Division in accordance with 7 CFR
part 11.
(f) If the person appeals the determination of ineligibility to the
National Appeals Division, the insurance provider will be notified and
provided with an opportunity to participate in
[[Page 51]]
the proceeding if permitted by 7 CFR part 11.
Sec. 400.681 Effect of ineligibility.
(a) The period of ineligibility will be effective:
(1) For ineligibility as a result of a delinquent debt, the date the
debt has been determined to be delinquent until the debt has been paid
in full, discharged in bankruptcy, or the person has executed a
scheduled installment payment agreement;
(2) For ineligibility as a result of a violation of the controlled
substance provisions of the Food Security Act of 1985, at the beginning
of the crop year in which the producer was convicted and the four
subsequent consecutive crop years; and
(3) For ineligibility as a result of a disqualification under
section 506(n) of the Act, the date that the Administrative Law Judge
signs the order disqualifying the person until the period specified in
the order of disqualification has expired.
(b) Once the person has been determined to be ineligible:
(1) All policies in which the ineligible person is the sole insured
will be void for the period specified in Sec. 400.681(a);
(2) If the ineligible person is a general partnership, all partners
will be individually ineligible and any policy in which a partner has a
100 percent interest will be void for the period specified in Sec.
400.681(a). The partnership and all partners will be removed from any
policy in which they have a substantial beneficial interest, and the
policyholder share under the policies will be reduced commensurate with
the ineligible person's share;
(3) If the applicant or policyholder is a corporation, partnership,
or other business entity, and an ineligible person has a substantial
beneficial interest in the applicant or policyholder, the application
may be accepted or existing policies remain in effect, although the
ineligible person will be removed from the policies and the policyholder
share under the policies will be reduced commensurate with the
ineligible person's share;
(4) If the applicant or policyholder is a corporation, partnership,
or other business entity that was created to conceal the interest of a
person in the farming operation or to evade the ineligibility
determination of a person with a substantial beneficial interest in the
applicant or policyholder, the corporation, partnership or other
business entity will be disregarded, the individual shareholders or
partners will be personally responsible, and any shareholder or partner
that is ineligible will be removed from the policy and the policyholder
share under the policies will be reduced commensurate with the
ineligible person's share;
(5) Any indemnities or payments made on a voided policy, or on the
portion of the policy reduced because of ineligibility, will be declared
overpayments and must be repaid; and
(6) If the policy is voided, all producer paid premiums may be
refunded, or if an ineligible person is removed from a policy, the
portion of the producer paid premium commensurate with the ineligible
person's share may be refunded, less a reasonable amount for expense and
handling in accordance with 7 CFR 400.47.
(c) The spouse and minor children of an individual are considered to
be the same as the individual for purposes of this subpart except that:
(1) The spouse who was actively engaged in farming in a separate
farming operation will be a separate person with respect to that
separate farming operation so long as that operation remains separate
and distinct from any farming operation conducted by the other spouse
(Transfers of interest in a farming operation from one spouse to another
will not be considered as a separate farming operation.);
(2) A minor child who is actively engaged in farming in a separate
farming operation will be a separate person with respect to that
separate farming operation if:
(i) The parent or other entity in which the parent has a substantial
beneficial interest does not have any interest in the minor's separate
farming operation or in any production from such operation;
(ii) The minor has established and maintains a separate household
from the parent;
[[Page 52]]
(iii) The minor personally carries out the farming activities with
respect to the minor's farming operation; and
(iv) The minor establishes separate accounting and record keeping
for the minor's farming operation.
Sec. 400.682 Criteria for reinstatement of eligibility.
A person who has been determined ineligible may have eligibility
reinstated as follows:
(a) A delinquent debt owed on a crop insurance policy insured or
reinsured by FCIC or any delinquent debt due FCIC. Eligibility may be
reinstated after the debt is paid in full or discharged in bankruptcy,
or the person has executed a scheduled installment payment agreement
accepted by FCIC or the insurance provider. Eligibility may be
reinstated as of the date the debt is paid, the date the agreement is
accepted, or the date the debt is discharged in bankruptcy.
(b) Violations of the controlled substance provisions of the Food
Security Act of 1985, as amended. Eligibility may be reinstated after
the period of ineligibility stated in Sec. 400.681 has expired.
(c) Disqualification under section 506(n) of the Act. Eligibility
may be reinstated when the period of disqualification determined in the
administrative proceedings has expired and payment of all penalties and
overpayments have been completed.
(d) Timing of reinstatement of eligibility. After eligibility has
been reinstated, the person must complete a new application for crop
insurance coverage on or before the applicable sales closing date. If
the date of reinstatement of eligibility occurs after the applicable
sales closing date for the crop year, the person may not participate
until the following crop year. If the National Appeals Division
determines that the person should not have been placed on the Ineligible
Tracking System, reinstatement will be effective at the beginning of the
crop year for which the producer was listed on the Ineligible Tracking
System and the person will be entitled to all applicable benefits under
the policy.
Sec. 400.683 Administration and maintenance.
(a) Ineligible producer data will be maintained in a system of
records in accordance with the Privacy Act, 5 U.S.C. 552a.
(1) The Ineligible Tracking System is a record of all persons who
have been determined to be ineligible for participation in any program
pursuant to this subpart. This system contains identifying information
of the ineligible person including, but not limited to, name, address,
telephone number, SSN or EIN, reason for ineligibility, and time period
for ineligibility.
(2) Information in the Ineligible Tracking System may be used by
Federal agencies, FCIC employees, contractors, and reinsured companies
and their personnel who require such information in the performance of
their duties in connection with any program administered under the Act.
The information may be furnished to other users including, but not
limited to, FCIC contracted agencies; credit reporting agencies and
collection agencies; in response to judicial orders in the course of
litigation; and other users as may be appropriate or required by law or
regulation. The individual information will be made available in the
form of various reports and notices produced from the Ineligible
Tracking System, based on valid requests.
(3) Supporting documentation regarding the determination of
ineligibility and reinstatement of eligibility will be maintained by
FCIC and FSA, or its contractors, reinsured companies, and Federal and
State agencies. This documentation will be maintained consistent with
the electronic information contained within the Ineligible Tracking
System.
(b) Information may be entered into the Ineligible Tracking System
by FCIC or FSA personnel.
(c) All persons applying for or renewing crop insurance contracts
issued or reinsured by FCIC will be subject to validation of their
eligibility status against the Ineligible Tracking System. Applications
or benefits approved and accepted are considered approved or accepted
subject to review of eligibility status in accordance with this subpart.
[[Page 53]]
Subpart V_Submission of Policies, Provisions of Policies and Rates of
Premium
Authority: 7 U.S.C. 1506(1), 1506(p).
Source: 66 FR 47951, Sept. 17, 2001, unless otherwise noted.
Sec. 400.700 Basis, purpose, and applicability.
This subpart establishes guidelines for the submission of policies,
plans of insurance, and rates of premium to the Board under section
508(h) of the Act and for non-reinsured supplemental policies in
accordance with the SRA, and the roles and responsibilities of FCIC and
the applicant. It also specifies the procedures for requesting
reimbursement for research and development and maintenance costs for
products and the approval process.
Sec. 400.701 Definitions.
Act. The Federal Crop Insurance Act, as amended (7 U.S.C. 1501 et
seq.)
Actuarial documents. The forms and associated materials applicable
to a crop or insurance year, which are available for public inspection
in an agent's office and FCIC's website at www.act.fcic.usda.gov. These
materials show the insurable acreage or commodities, the applicable
guarantees, coverage levels, premium rates, insurable cropping practices
common to the area, and other related information regarding crop
insurance or other risk management plans of insurance in the county or
state.
Actuarially appropriate. Premium rates determined to cover the
anticipated loss and a reasonable reserve based on valid reasoning, an
examination of all known risk data, and founded on thorough knowledge or
experience of the expected value of all future costs associated with a
risk transfer.
Administrative and operating (A&O) subsidy. An amount for expenses
associated with selling and servicing insurance products authorized by
the Act and paid by FCIC on behalf of the producer to approved insurance
providers.
Applicant. Any person or entity that submits a policy, provisions of
a policy, or premium rates to the Board for approval under section
508(h) of the Act.
Approved insurance provider. A private insurance company that has
been approved by FCIC to provide insurance coverage to producers
participating in programs authorized by the Act.
Board. The Board of Directors of FCIC.
Complexity. Complexity takes into consideration such factors as
originality, the number and type of factual determinations necessary to
establish insurable interest, evaluate risk, and determine whether an
indemnity is payable, the number of commodities and areas to which the
product is applicable, the rating methodology, the number of risks
covered, unique policy provisions or endorsements, the delivery process
of the submission, and the process of creating rules, policy terms and
conditions, underwriting procedures, rating methodologies,
administrative and operating procedures, and supporting materials.
Development. The process of creating rules, methodologies,
administrative and operating procedures, supporting materials, and
documentation necessary to submit, gain approval, and implement a
proposed policy or coverage.
Endorsement. A document appended to a policy reinsured under the Act
that supplements or amends the insurance coverage of that policy.
FCIC. The Federal Crop Insurance Corporation, a wholly owned
government corporation within USDA.
Maintenance. The process of continual support and improvement, as
needed, for a policy or plan of insurance, including the periodic review
of setting prices, updating premium rates or the rating methodology,
updating or modifying policy terms and conditions, expanding into new
commodities and areas, and other measures necessary to assure financial
viability and actuarial soundness or to respond to statutory or
regulatory changes.
Maintenance costs. Specific expenses associated with the maintenance
of a policy during the maintenance period.
Maintenance period. A period of time that begins on the date the
Board approves the submission for maintenance and ends on the date that
is not more than four reinsurance years after such approval.
[[Page 54]]
Manager. The Manager of FCIC.
Marketable. An evaluation by the Board of the marketing plan
submitted by the applicant that determines that producers will purchase
the product and approved insurance providers will sell the product based
on credible evidence provided by the applicant.
Marketing plan. A detailed, written plan that identifies, at a
minimum, the expected number of potential buyers, premium, and
liability, the data upon which such information is based and a
prescribed insurance year cycle.
Multiple peril crop insurance (MPCI). All insurance policies
reinsured by FCIC that offers coverage for loss of production.
National Agricultural Statistics Service (NASS). An agency of the
United States Department of Agriculture, or a successor agency.
Non-reinsured supplemental policy (NRS). A policy, endorsement or
other risk management tool that is developed by an approved insurance
provider, or an entity affiliated in some manner with an approved
insurance provider, that offers coverage, other than for loss related to
hail, for commodities in addition to coverage available under a policy
or plan of insurance that is reinsured by FCIC. This policy, endorsement
or other risk management tool has not been submitted under 508(h) for
FCIC approval for reinsurance.
Non-significant changes. Minor changes to the policy or plan of
insurance, such as technical corrections, that do not affect the rating
or pricing methodologies, the amount of subsidy owed, the amount of
coverage, the interests of producers, FCIC's reinsurance risk, or any
condition that may affect liability or the amount of loss to be paid
under the policy. This includes any changes due to statutory or
regulatory requirements.
Policy. A contract for insurance that includes an application, Basic
Provisions, applicable commodity provisions, other applicable options
and endorsements, the actuarial documents for the insured commodity, and
related materials.
Plan of insurance. A class of policies, such as MPCI or Crop Revenue
Coverage, that offer a specific type of coverage to one or more
agricultural commodities.
Rate of premium. The dollar amount per insured unit or percentage
rate per dollar of liability that is needed to pay anticipated losses
and provide a reasonable reserve.
Related materials. The actuarial documents, special provisions, and
any underwriting or loss adjustment manuals, handbooks, forms or other
materials.
Research. The processes used to determine the need, producer
interest, if the product is marketable, and feasibility of a proposed
policy, plan of insurance or rate of premium.
Research and development costs. Specific expenses incurred and
directly related to research and development of a submission approved by
the Board.
Revenue insurance. Plans of insurance providing protection against
loss of income or change in price.
Risk Management Agency (RMA). An agency of USDA responsible for the
administration of all programs authorized under the Act and other
authorities.
Risk subsidy. The portion of the approved premium paid by FCIC on
behalf of the insured person.
Sales closing date. The final calendar date on which an approved
insurance provider may accept an application by a producer for
insurance.
Secretary. The Secretary of the United States Department of
Agriculture.
Significant change. Any change to the policy or plan of insurance
that may affect the rating and pricing methodologies, the amount of
subsidy owed, the amount of coverage, the interests of producers, FCIC's
reinsurance risk, or any condition that may affect liability or the
amount of loss to be paid under the policy.
Special Provisions. The part of the policy that contains specific
provisions of insurance for each insured crop that may vary by
geographic area.
Submission. A policy, plan of insurance, provision of a policy or
plan of insurance, or rates of premium provided by an applicant to FCIC
in accordance with the requirements of this subpart.
USDA. The United States Department of Agriculture.
[[Page 55]]
User fees. Fees, approved by the Board, that can be charged to
approved insurance providers for use of a policy or plan of insurance.
Sec. 400.702 Confidentiality of submission and duration of
confidentiality.
(a) Prior to approval by the Board, any submission made to the Board
under section 508(h) of the Act, including any information generated
from the submission, will be considered confidential commercial or
financial information for purposes of 5 U.S.C. 552(b)(4) and will not be
released by FCIC to the public, unless the applicant authorizes such
release in writing.
(b) Once the Board approves a submission, all information provided
with the submission, or generated in the approval process, may be
released to the public, including any mathematical modeling and data,
unless it remains confidential business information under 5 U.S.C.
552(b).
(c) Any submission disapproved by the Board will remain confidential
commercial or financial information in accordance with 5 U.S.C. 552(b)
and no information related to such submission will be released by FCIC
unless authorized in writing by the applicant.
Sec. 400.703 Timing of submission.
(a) A submission may only be provided to FCIC the first 5 business
days of the months of, January, April, July, and October.
(b) Any submission not provided within the first 5 business days of
a month stated in paragraph (a) of this section, will be considered to
have been provided the next month stated in paragraph (a). For example,
if an applicant provides a submission on the January 10, it will be
considered to have been received on April 1.
(c) Any submission must be provided to the Deputy Administrator,
Research and Development (or any successor), Risk Management Agency,
6501 Beacon Drive, Stop 0812, Kansas City, MO 64133-4676, not later than
180 days prior to the earliest proposed sales closing date to be
considered for sale in the requested crop year.
Sec. 400.704 Type of submission.
(a) An applicant may submit to the Board in accordance with Sec.
400.705:
(1) A policy or plan of insurance not currently reinsured by FCIC;
(2) One or more proposed revisions to a policy or plan of insurance
authorized under the Act; or
(3) Rates of premium for any policy or plan of insurance authorized
under the Act.
(b) An applicant must submit to the Board any significant change to
a previously approved submission prior to making the change.
Sec. 400.705 Contents required for a new submission or changes to
a previously approved submission.
A complete submission must contain the following material, as
applicable, in the order given, in a 3-ring binder, with section
dividers clearly labeling each section. The entire submission must be
included in an electronic format acceptable to RMA. Six identical copies
of each submission must be sent to the Deputy Administrator, Research
and Development (or successor), Risk Management Agency, 6501 Beacon
Drive, Stop 0812, Kansas City, MO 64133-4676, and one identical copy of
each submission provided to the Administrator, Risk Management Agency,
1400 Independence Ave., Stop 0801, Room 3053 South Building, Washington,
DC 20250-0801.
(a) The first section will contain general information, including,
as applicable:
(1) The applicant's name, address or primary business location,
phone number, and e-mail address;
(2) The type of submission (see Sec. 400.704);
(3) A statement of whether the applicant is requesting:
(i) Reinsurance, which includes risk subsidy and A&O subsidy;
(ii) Costs for reimbursement for research and development; or
(iii) Estimated costs for reimbursement for maintenance.
(4) The proposed agricultural commodities, including types,
varieties, and practices covered by the submission;
[[Page 56]]
(5) The crop and reinsurance years in which the submission is
proposed to be available for purchase by producers;
(6) The proposed sales closing date;
(7) The proposed duration and scope of the plan of insurance;
(8) A marketing plan;
(9) Any known or anticipated future expansion plans;
(10) Identification, including names, addresses, telephone numbers,
and e-mail addresses, of the persons responsible for:
(i) Addressing questions regarding the policy, underwriting rules
and procedures, rate and price methodologies, data processing and record
keeping requirements, and any other questions that may arise in
administering the program after it is approved; and
(ii) Annual reviews to ensure compliance with all requirements of
the Act, this subpart, and any agreements executed between the applicant
and FCIC.
(11) A statement whether the submission will be filed with the
applicable office responsible for regulating insurance in each state
proposed for insurance coverage, and, if not, reasons why the submission
will not be filed for review.
(b) The second section must contain the benefits of the plan,
including, as applicable, a statement about the plan that demonstrates:
(1) How the submission offers coverage or other benefits not
currently available from existing public and private programs.
(2) The demand for the submission, which must be supported by
information from market research, producers or producer groups, agents,
lending institutions, and other interested parties that provide
verifiable evidence of demand; and
(3) How the submission meets public policy goals and objectives
consistent with the Act and other laws, as well as policy goals
supported by USDA and the Federal Government.
(c) The third section must contain the policy, including, as
applicable:
(1) If the submission involves a new insurance policy or plan of
insurance:
(i) All applicable policy provisions; and,
(ii) A list and description of any additional coverage that may be
elected by the insured, including how such coverage may be obtained.
(2) If the submission involves a change to a previously approved
policy, plan of insurance, or rates of premium, the proposed revisions,
rationale for each change, data and analysis supporting each change, the
impact of each change, and the impact of all changes in aggregate.
(d) The fourth section must contain the information related to the
marketing of the policy or plan of insurance, including, as applicable:
(1) A list of states and counties where the submission is proposed
to be offered;
(2) The amount of commodity (acres, head, board feet, etc.), the
amount of production, and the value of each agricultural commodity
proposed to be covered in each proposed county and state;
(3) The expected liability and premium for each proposed county and
state;
(4) If available, any insurance experience for each year and in each
proposed county and state in which the policy has been previously
offered for sale including an evaluation of the policy's performance
and, if data are available, a comparison with other similar insurance
policies reinsured under the Act; and
(5) The projected frequency and severity of loss if the proposed
submission is approved.
(e) The fifth section must contain the information related to the
underwriting of the submission, including, as applicable:
(1) A sample of each document or form that will be used to present
and sell the product;
(2) Detailed rules for determining insurance eligibility, including
all producer reporting requirements;
(3) Relevant dates, if not included in the proposed policy;
(4) Detailed examples of the data and calculations needed to
establish the insurance guarantee, liability, and premium per acre or
other unit of measure, including worksheets that provide the
calculations in sufficient detail and in the same order as presented in
the policy to allow verification that the
[[Page 57]]
premiums charged for the coverage are consistent with policy provisions;
(5) A detailed example of calculations used to determine a claim for
indemnity for each unique situation in which a loss may be payable;
(6) A detailed description of the causes of loss covered by the
policy or plan of insurance and any causes of loss excluded; and
(7) Any statements to be included in the actuarial documents.
(f) The sixth section must contain the information related to prices
and the rates of premium, including, as applicable:
(1) A list of all assumptions made in the premium rating and
commodity pricing methodologies, and the basis for these assumptions;
(2) A detailed description of the pricing and rating methodologies,
including supporting documentation, all mathematical formulas,
equations, and data sources used in determining rates and prices and an
explanation of premium components that detail how rates were determined
for each component, that demonstrate the rate is appropriate;
(3) An example of a rate calculation and an example of a price
calculation;
(4) A discussion of the reliability of the data; and
(5) An analysis of the results of simulations or modeling showing
the performance of proposed rates and commodity prices, as applicable,
based on one or more of the following (Such simulations must use all
years of experience available to the applicant):
(i) A recalculation of total premium and losses compared to a
similar or comparable insurance plan offered under the authority of the
Act with modifications, as needed, to represent the components of the
submission;
(ii) A simulation based on the probability distributions used to
develop the rates and commodity prices, as applicable, including
sensitivity tests that demonstrate price or yield extremes, and the
impact of inappropriate assumptions; or
(iii) Any other comparable simulation that provides results
indicating both aggregate and individual performance of the submission
under various scenarios depicting good and poor actuarial experience.
(g) The seventh section must contain an evaluation and certification
from an accredited associate or fellow of the Casualty Actuarial
Society, or other similarly qualified professional, that certifies the
submission is actuarially appropriate and consistent with appropriate
insurance principles and practices.
(h) The eighth section must contain all forms applicable to the
submission, including:
(1) An application for insurance and procedures for accepting the
application; and
(2) All applicable policy forms, instructions and procedures that
are necessary to establish the amounts of coverage or loss.
(i) The ninth section must contain the following;
(1) A statement agreeing that sales will be deferred until the next
applicable sales closing date if policy information, forms, premium
rates, prices, any automated premium calculator, and other related
information or documents are not made available to all approved
insurance providers:
(i) For a new submission, at least 60 days prior to the earliest
sales closing date specified in the submission; or
(ii) For a revised submission, at least 60 days prior to the
earliest contract change date specified in the submission;
(2) An explanation of any provision of the policy not authorized
under the Act and identification of the portion of the rate of premium
due to these provisions;
(3) Agent and loss adjuster training plans; and
(4) A certification from the applicant's legal counsel that the
submission meets and complies with all requirements of the Act,
applicable regulations, and any reinsurance agreement.
(j) The tenth section must contain the documents that demonstrate
the submission complies in all respects with the standards established
for processing and acceptance of data as specified in the FCIC Data
Acceptance System Handbook (Manual 13), unless other arrangements have
been made
[[Page 58]]
with RMA. This handbook is available from the Risk Management Agency,
6501 Beacon Drive, Stop 0812, Kansas City, MO 64133-4676 or on the FCIC
web site (http://www.rma.usda.gov/data/m13).
(k) The eleventh section must contain the information related to a
request for reimbursement of research and development costs, and
maintenance costs, as applicable, in accordance with Sec. 400.712.
(l) The twelfth section must contain executed certification
statements in accordance with the following:
(1) ``{Applicant's Name{time} hereby claim that the amounts set
forth in this section and Sec. 400.712 are correct and due and owing to
{Applicant's Name{time} by FCIC under the Federal Crop Insurance Act.''
(2) ``{Applicant Name{time} understands that, in addition to
criminal fines and imprisonment, the submission of false or fraudulent
statements or claims may result in civil and administrative sanctions.''
Sec. 400.706 Review of submission.
(a) Prior to providing any submission, including a new submission, a
resubmission, or a change to a previously approved submission, to the
Board for its review, RMA will:
(1) Review the submission for completeness to determine if all
necessary and appropriate documentation is included in accordance with
Sec. 400.705;
(2) Review the submission to determine whether the documentation is
of a level of quality to conduct a meaningful review by the Board;
(3) If the submission is determined to be complete and the
documentation of sufficient quality to permit a meaningful review, the
submission will be considered to have been submitted to the Board for
approval or disapproval. The date that FCIC determines that the
submission is complete, as notified to the applicant, will be the date
that the time frame for approval or disapproval by the Board begins;
(4) Return to the applicant any submission lacking any of the
information required in Sec. 400.705, or with documentation that is of
insufficient quality to permit a meaningful review (such submission will
not be considered as provided to the Board for the purpose of commencing
the period by which the submission must be approved or disapproved by
the Board. If the submission is resubmitted, it will be considered a new
submission.);
(b) When FCIC determines that the submission is complete and the
documentation of sufficient quality to permit a meaningful review, it
will forward the submission to the Board for consideration for approval
or disapproval.
(c) During the consideration process, the Board will:
(1) For all new submissions or significant changes to previously
approved submissions, contract with five independent persons with
underwriting or actuarial experience to review the submission:
(i) Of the five reviewers, no more than one will be employed by the
Federal Government, and none may be employed by any approved insurance
provider or their representatives; and
(ii) The reviewers will each provide their assessment of whether the
submission protects the interests of agricultural producers and
taxpayers, is actuarially appropriate, follows appropriate insurance
principles, meets the requirements of the Act, does not contain
excessive risks, follows sound, reasonable, and appropriate underwriting
principles, as well as other items the Board may deem necessary;
(2) For all submissions:
(i) Request review by FCIC to determine whether the submission
protects the interests of agricultural producers and taxpayers, is
actuarially appropriate, follows appropriate insurance principles, meets
the requirements of the Act, does not contain excessive risks, is
consistent with USDA's public policy goals, does not increase or shift
risk to any other FCIC reinsured policy, can be administered and
delivered efficiently and effectively, and meets the standards pursuant
to Sec. 400.712 for reimbursement of research and development costs and
maintenance costs, if requested, and determine whether the requested
amount of government reinsurance, risk subsidy, and administrative and
operating subsidies is reasonable and appropriate for the type of
[[Page 59]]
coverage provided by the policy submission; and
(ii) Seek review from the Office of the General Counsel (OGC) to
determine whether the interests of producers are adequately protected
and if the submission conforms to the requirements of the Act.
(3) Render a decision to approve or give notice of an intent to
disapprove within 90 days after the date the submission is considered
submitted to the Board in accordance with paragraph (a)(3) of this
section, unless the applicant and Board agree to a time delay in
accordance with paragraph (h) of this section.
(d) All comments and evaluations will be forwarded to the Board by a
date determined to allow the Board adequate time for review.
(e) The Board will consider all comments, evaluations, and
recommendations in its review process. Prior to making a decision, the
Board may request additional information from RMA, OGC, the independent
reviewers, or the applicant.
(f) The Board may disapprove a submission if it determines that:
(1) The interests of producers are not protected;
(2) The premium rates are not actuarially appropriate;
(3) The submission does not conform to sound insurance and
underwriting principles;
(4) The risks associated with the submission are excessive; or
(5) There is insufficient time before the submission would become
effective under section 508(h) of the Act for the Board to make an
informed decision with respect to whether the interests of producers are
protected, the premium rates are actuarially appropriate, or the risks
associated with the submission are excessive.
(g) If the Board intends to disapprove the submission, the applicant
will be notified in writing at least 30 days prior to the Board taking
such action. The Board will provide the applicant with a written
explanation for the intent to disapprove the submission.
(h) An applicant may request, at any time, a time delay before the
Board provides a notice of intent to disapprove the submission. The
Board is not required to agree to such an extension.
(1) The applicant understands that any requested time delay will not
be limited in the length time or the number of delays. However, delays
may make implementation of the submission for the targeted crop year
impractical or impossible.
(2) The time period during which the Board must make a decision to
approve or disapprove the submission is not in effect during any time
delay requested by the applicant.
(3) The Board and the applicant must agree to a time period in which
the Board must make its decision to approve or disapprove after the
expiration of any requested time delay.
(i) The applicant may withdraw a submission at any time by written
request to the Board. A withdrawn submission that is resubmitted will
result in the submission being deemed a new submission for the purposes
of determining the amount of time that the Board must act on such
submission.
(j) Prior to any Board action taken or after the Board has provided
formal notice of its intent to disapprove all or part of a submission:
(1) Modification can occur in writing or orally prior to the Board
providing notice of its intent to disapprove all or part of a
submission.
(2) After formal notice of intent to disapprove all or part of a
submission has been provided by the Board, the applicant must provide
written to the Board that the submission will be modified not later than
30 days after the Board provided such notice. Except as provided in
paragraph (j)(5) of this section, the applicant must also include the
date that the modification will be provided to the Board.
(3) If the modification is in direct response to reviewer comments,
the Board may act on the modification immediately or seek further review
within the 30 day time period allowed.
(4) The Board will approve or disapprove a modified submission not
later than 30 days after receiving a modified submission from the
applicant, unless the applicant and the Board agree to a time delay. If
a time delay is agreed upon the time period during which the Board must
act on
[[Page 60]]
the modified submission will not be in effect during the delay.
(5) The Board will disapprove a modified submission if:
(i) All causes for disapproval stated by the Board in its
notification of its intent to disapprove the submission are not
satisfactorily addressed;
(ii) Insufficient time is available for review of the modified
submission to determine whether all causes for disapproval have been
satisfactorily addressed; or
(iii) If modification is so substantial that the Board determines
that additional independent review is required and a time delay can not
be agreed to allow for such review.
(k) When the applicant is notified of the Board's intent to
disapprove and the submission is not revised or withdrawn, the Board
will provide written notification to the applicant that the submission
has been disapproved no less than 30 days after the date that the notice
of intent to disapprove was provided to the applicant.
(l) If the Board fails to take action on a new submission within the
prescribed 90 day period in paragraph (c)(3) of this section, or within
the time period in accordance with paragraph (h)(3) of this section
after receiving the revised submission, such submission will be deemed
approved by the Board for the initial reinsurance year designated for
the submission. The Board must approve the submission for it to be
available for any subsequent reinsurance year.
Sec. 400.707 Presentation to the Board for approval or disapproval.
(a) The Board will inform the applicant of the date, time, and place
of the Board meeting.
(b) The applicant will be given the opportunity and is encouraged to
present the submission to the Board in person. The applicant must
confirm, in writing, whether the applicant will present the submission
to the Board.
(c) If the applicant elects, at any time, not to present the
submission to the Board, the Board will make its decision based on the
submission and the reviews provided in accordance with Sec. 400.706(c).
Sec. 400.708 Approved submission.
(a) After a submission is approved by the Board, and prior to it
being made available for sale to producers, the following items, as
applicable, must be completed:
(1) If the Board requires, an agreement between the applicant and
FCIC that specifies the responsibilities of each with respect to the
implementation, delivery and oversight of the submission, including the
disposition of property rights for the policy; and
(2) A reinsurance agreement if terms and conditions differ from the
Standard Reinsurance Agreement.
(b) A submission approved by the Board under this subpart will be
made available to all approved insurance providers under the same
reinsurance and subsidy terms and conditions as received by the
applicant.
(c) Any solicitation, sales, marketing, or advertising of the
approved submission by the applicant before FCIC has made the submission
and related materials available to all interested parties through its
official issuance system will result in the denial of reinsurance, risk
subsidy, and A&O subsidy for those policies affected.
Sec. 400.709 Roles and responsibilities.
(a) With respect to the applicant:
(1) The applicant is responsible for:
(i) Preparing and ensuring that all policy documents, rates of
premium, and supporting materials, including actuarial materials, are
submitted to FCIC in the form approved by the Board;
(ii) Except as provided in Sec. 400.712(k)(2), annually updating
and providing maintenance changes no later than 180 days prior to the
earliest sales closing date for the commodity in all counties or states
in which the policy or plan of insurance is sold and;
(iii) Addressing responses to procedural issues, questions, problems
or clarifications in regard to a policy or plan of insurance (all such
resolutions will be communicated to all approved insurance providers
through FCIC's official issuance system.);
(2) Only the applicant may make changes to the policy, plan of
insurance, or rates of premium approved by
[[Page 61]]
the Board (Any changes, both non-significant and significant, must be
submitted to FCIC no later than 180 days prior to the earliest sales
closing date for the commodity in all counties or states in which the
policy or plan of insurance is sold. Significant changes must be
submitted to the Board for review in accordance with this subpart and
will be considered as a new submission.);
(3) Except as provided in paragraph (a)(4) of this section, the
applicant is solely liable for any mistakes, errors, or flaws in the
submitted policy, plan of insurance, their related materials, or the
rates of premium that have been approved by the Board unless the policy
or plan of insurance is transferred to FCIC in accordance with Sec.
400.712(k)(2), the applicant remains liable for any mistakes, errors, or
flaws that occurred prior to the transfer of the policy or plan of
insurance;
(4) If the mistake, error, or flaw in the policy, plan of insurance,
their related materials, or the rates of premium is discovered not less
than 45 days prior to the cancellation or termination date for the
policy or plan of insurance, the applicant may request in writing that
FCIC withdraw the approved policy, plan of insurance, or rates of
premium:
(i) Such request must state the discovered mistake, error, or flaw
in the policy, plan of insurance, or rates of premium, and the expected
impact on the program; and
(ii) For all timely received requests for withdrawal, no liability
will attach to such policies, plans of insurance, or rates of premium
that have been withdrawn and no producer, approved insurance provider,
or any other person will have a right of action against the applicant;
and
(5) Notwithstanding the policy provisions regarding cancellation,
any policy, plan of insurance, or rates of premium that have been timely
withdrawn are deemed canceled and applications for insurance are not
accepted as of the date that FCIC publishes the notice of withdrawal on
its website at www.act.fcic.usda.gov. Producers will have the option of
selecting any other policy or plan of insurance authorized under the Act
that is available in their area by the sales closing date for such
policy or plan of insurance.
(6) Failure of the applicant to perform the applicant's
responsibilities may result in the denial of reinsurance for the policy
or plan of insurance.
(b) With respect to FCIC:
(1) FCIC is responsible for:
(i) Ensuring that all approved insurance providers receive the
approved policy or plan of insurance, and related materials, for sale to
producers in a timely manner (All such information shall be communicated
to all approved insurance providers through FCIC's official issuance
system.);
(ii) Ensuring that all approved insurance providers receive
reinsurance under the same terms and conditions as the applicant
(approved insurance providers should contact FCIC to obtain and execute
a copy of the reinsurance agreement) if required;
(iii) Conducting the best review of the submission possible in the
time allowed; and
(iv) Reviewing the activities of approved insurance providers,
agents, loss adjusters, and producers to ensure that they are in
accordance with the terms of the policy or plan of insurance, the
reinsurance agreement, and all applicable procedures;
(2) FCIC will not be liable for any mistakes, errors, or flaws in
the policy, plan of insurance, their related materials, or the rates of
premium and no cause of action will exist against FCIC as a result of
such mistake, error, or flaw in a submission submitted under this
subpart;
(3) If at any time prior to the cancellation or termination date,
FCIC discovers that there is a mistake, error, or flaw in the policy,
plan of insurance, their related materials, or the rates of premium that
results in over or under insurance, FCIC will deny reinsurance to such
policy or plan of insurance:
(4) If reinsurance is denied under paragraph (b)(3) of this section,
the approved insurance provider will have the option of:
(i) Selling and servicing the policy or plan of insurance at its own
risk and without any subsidy; or
[[Page 62]]
(ii) Canceling the policy or plan of insurance in accordance with
its terms; and
(5) If the applicant transfers the policy or plan of insurance to
FCIC in accordance with Sec. 400.712 (k)(2), FCIC will assume the
liability for any mistakes, errors, or flaws that occur after the policy
or plan insurance as been transferred and FCIC is in control of
maintenance.
Sec. 400.710 Preemption and premium taxation.
A policy or plan of insurance that is approved by the Board for FCIC
reinsurance is preempted from state and local taxation.
Sec. 400.711 Right of review, modification, and the withdrawal of
reinsurance.
At any time after approval, the Board may review any policy, plan of
insurance, related materials, and rates of premium approved under this
subpart and request additional information to determine whether the
policy, plan of insurance, related materials, and rates of premium
comply with statutory or regulatory changes or court orders, are still
actuarially appropriate, and protect program integrity and the interests
of producers. The Board will notify the applicant of any problem or
issue that may arise and allow the applicant an opportunity to make any
needed change. The Board may deny reinsurance for the applicable policy,
plan of insurance or rate of premium if:
(a) The applicant fails to perform their responsibilities under
Sec. 400.709; or
(b) If the applicant does not satisfactorily provide materials or
resolve any issue so that necessary changes can be made prior to the
earliest contract change date.
Sec. 400.712 Research and development reimbursement, maintenance
reimbursement, and user fees.
(a) Submissions approved by the Board for reinsurance under section
508(h) of the Act may be eligible for a one time payment of research and
development costs and maintenance costs for up to four reinsurance
years, as determined by the Board after the date such costs have been
approved by the Board. Reimbursements made under this section will be
considered as payment in full for research, development, and
maintenance, as applicable, for any policy or plan of insurance and any
property rights to the policy or plan of insurance.
(b) For submissions submitted to the Board for reinsurance after
publication of this subpart, an estimate of a request for reimbursement
of research and development costs and maintenance costs, as applicable,
must be included with the original submission to the Board in accordance
with this section. These estimates will only be used by FCIC for the
purpose of tracking potential expenditures and will not provided a basis
for making any reimbursements under this section. Documentation of
actual costs allowed under this section will be used to determine any
reimbursement.
(c) For a submission approved by the Board, or submitted to the
Board, prior to publication of this subpart, a request for reimbursement
for research and development costs and estimated maintenance costs must
be received within 60 days following publication of this subpart or
approval of the submission by the Board. This request should be sent to
the Deputy Administrator, Research and Development (or any successor),
Risk Management Agency, 6501 Beacon Drive, Stop 0812, Kansas City, MO
64133-4676, and also provide one identical copy of each submission to
the Administrator, Risk Management Agency, 1400 Independence Ave., Stop
0801, Room 3053 South Building, Washington, D.C. 20250-0801.
(d) To be eligible for any reimbursement under this section, FCIC
must determine that a submission is marketable.
(e) To be considered for reimbursement in any fiscal year, complete
and final requests for research and development costs and maintenance
costs, as applicable, must be received by FCIC not later than August 1.
For 2001 fiscal year only, FCIC may consider reimbursement for research
and development costs on approved submissions for any request received
by September 1,
[[Page 63]]
2001. Given the limitation on funds, regardless of when the request is
received, no payment will be made prior to September 15 of the
applicable fiscal year.
(f) There are limited funds available on an annual fiscal year basis
as contained in the Act. Therefore, requests for reimbursement will not
be considered in the order in which they are received. Consistent with
paragraphs (g), (h), (i), (j), and (l) of this section, if all
applicants' requests for reimbursement of research and development costs
and maintenance costs in any fiscal year:
(1) Do not exceed the maximum amount authorized by law, the
applicants may receive the full amount of reimbursement authorized under
these subsections.
(2) Exceed the amount authorized by law, each applicant's
reimbursement will be determined by dividing the total amount of each
individual applicants' reimbursable costs authorized in paragraphs (g),
(h), (i), (j), and (l) by the total amount of the aggregate of all
applicants' reimbursable costs authorized in paragraphs (g), (h), (i),
(j), and (l) for that year and multiplying the result by the amount of
reimbursement authorized under the Act.
(g) The amount of reimbursement for research and development costs
and maintenance costs, as applicable, will be determined based on the
amount of reimbursement authorized under paragraph (f) of this section,
adjusted for the complexity of the policy, plan of insurance, or rates
of premium, as determined by FCIC, and the size of the area in which the
policy, plan of insurance, or rates of premium may be offered.
(1) Policies or plans of insurance that offer new and innovative
coverages that are not currently available will be eligible for a higher
reimbursement than policies or plans of insurance that are, or have
components that are, based on existing policies or plans of insurance.
(2) Policies or plans of insurance that offer new premium rating or
market price methodologies will be eligible for a higher reimbursement
than policies or plans of insurance that use existing premium rating or
market price methodologies.
(3) Policies or plans of insurance that cover new commodities that
are not otherwise covered by crop insurance or that offer innovative
coverage and original policy language will be eligible for a higher
reimbursement than policies or plans of insurance for commodities for
which insurance is currently available.
(4) Policies or plans of insurance that may be offered for sale
nationwide or in large geographical regions will be eligible for higher
reimbursement than those that are applicable to only a few counties or
states or a small geographical region.
(5) Any reimbursement under this subpart will be scored as follows:
(i) Complexity scores:
(A) Basic or Common Provisions:
(1) Uses existing policies or plans of insurance: 0.05
(2) Contains modifications to existing policies or plans of
insurance: 0.10
(3) Original (See paragraph (g)(3) of this section): 0.20
(B) Crop Provisions and Special Provisions:
(1) Uses existing policies or plans of insurance: 0.05
(2) Contains modifications to existing policies or plans of
insurance: 0.10
(3) Original (See paragraph (g)(3) of this section): 0.20
(C) Market prices:
(1) Uses existing policies or plans of insurance: 0.05
(2) Contains modifications to existing policies or plans of
insurance: 0.10
(3) Original (See paragraph (g)(3) of this section): 0.20
(D) Rates of Premium:
(1) Uses existing policies or plans of insurance: 0.05
(2) Contains modifications to existing policies or plans of
insurance: 0.10
(3) Original (See paragraph (g)(3) of this section): 0.20
(E) Underwriting:
(1) Uses existing policies or plans of insurance: 0.05
(2) Contains modifications to existing policies or plans of
insurance: 0.10
(3) Original (See paragraph (g)(3) of this section): 0.20
(ii) Geographic scope scores:
(A) Potential national availability: 0.10
[[Page 64]]
(B) Potential regional, state or county availability: 0.05
(6) In accordance with paragraph (e) of this section, those policies
or plans of insurance that receive a summed total score for both
complexity and geographic scope that is:
(i) Equal to or greater than 0.6 may receive the full amount of
reimbursement approved by the Board under paragraphs (h), (i) or (j) of
this section;
(ii) Greater than 0.25 but lower than 0.60 will receive a
reimbursement that is not greater than 75 percent of the full amount of
reimbursement approved by the Board under paragraphs (h), (i) or (j) of
this section; and
(iii) Equal to or less than 0.25 will receive a reimbursement that
is not greater than 50 percent of the full amount of reimbursement
approved by the Board under paragraphs (h), (i) or (j) of this section.
(h) For those submissions that were approved by the Board prior to
the date of publication of this subpart, reimbursement for research and
development costs will be determined in accordance with paragraph (i) of
this section or by multiplying the average number of policies earning
premium each crop year since inception of the policy or plan of
insurance by $7.00 and multiplying the result by the complexity and
scope score from paragraph (g) of this section.
(i) For those submissions submitted to the Board prior to the date
of publication of this subpart but not yet approved, or submitted to the
Board for approval after the date of publication of this part, research
and development costs must be supported by itemized statements and
supporting documentation (copies of contracts, billing statements, time
sheets, travel vouchers, accounting ledgers, etc.). Actual costs
submitted will be examined for reasonableness and may be adjusted at the
sole discretion of the Board.
(1) Allowable research and development expense items (directly
related to research and development of the submission only) may include
the following;
(i) Straight-time hourly wage, exclusive of bonuses, overtime pay,
or shift differentials (One line per employee, include job title, total
hours, and total dollars. Compensation amounts will be compared with the
Occupational Employment Statistics Survey, published each January by the
U.S. Department of Labor, Bureau of Labor Statistics);
(ii) Benefit cost per employee (Benefit costs are considered
overhead and will be compared with the Employment Cost Index Annual
Employer Cost Survey published each March by the U.S. Department of
Labor, Bureau of Labor Statistics.);
(iii) Contracted expenses (include a copy of the contract, billing
statements, accounting records, etc.);
(iv) Professional fees (include the job title, straight-time hourly
wage, total hours, and total dollars);
(v) Travel and transportation (One line per event, include the job
title, destination, purpose of travel, lodging cost, mileage, air or
other identified transportation costs, food and miscellaneous expenses,
other costs, and the total cost);
(vi) Software and computer programming developed specifically to
determine appropriate rates, prices, or coverage amounts (Identify the
item, include the purpose, and provide receipts or contract or straight-
time hourly wage, hours, and total cost. Software developed to calculate
premiums or losses, or development of software to send or receive data
between the producer, agent, approved insurance provider or RMA or such
other similar software may not be included as an allowable cost.);
(vii) Miscellaneous expenses such as postage, telephone, express
mail, and printing (Identify the item, cost per unit, number of items,
and total dollars);
(2) The following expenses are specifically not eligible for
research and development cost reimbursement:
(i) Copyright or patent fees;
(ii) Training costs;
(iii) State filing fees and expenses;
(iv) Normal ongoing administrative expenses;
(v) Paid or incurred losses;
(vi) Loss adjustment expenses;
(vii) Sales commission;
(viii) Marketing costs;
(ix) Indirect overhead costs;
(x) Lobbying costs;
[[Page 65]]
(xi) Product or applicant liability resulting from the research,
development, preparation or marketing of the policy;
(xii) Copyright infringement claims resulting from the research,
development, preparation or marketing of the policy;
(xiii) Costs of making program changes as a result of case or
statutory law effecting the policy; and
(xiv) Maintenance costs associated with the submission.
(j) Requests for reimbursement of maintenance costs for submissions
approved after publication of this subpart must be supported by itemized
statements and supporting documentary evidence for each reinsurance year
in the maintenance period. For submissions approved prior to publication
of this subpart, the applicant may provide itemized statements and
supporting documentary evidence or may request to receive not more than
15 percent of the amount of reimbursement for research and development
costs, as determined in accordance with Sec. 400.712, for the first
reinsurance year in the maintenance period. For all subsequent
reinsurance years, itemized and supporting documentary evidence must be
provided. Actual costs submitted will be examined for reasonableness and
may be adjusted at the sole discretion of the Board.
(1) Maintenance costs for the following activities may be
reimbursed:
(i) Expansion of the original submission to cover additional
commodities;
(ii) Expansion of the original submission into additional counties
or states;
(iii) Reasonable and required modifications to the policy and any
related materials;
(iv) Adjustment to premium rates and commodity prices as necessary
or required; and
(v) Other costs associated with maintaining the policy, as
determined by the Board.
(2) [Reserved]
(k) Not later than six months prior to the end of the last
reinsurance year in which a maintenance reimbursement will be paid, as
approved by the Board, the applicant must notify FCIC regarding its
election of the treatment of the policy or plan of insurance for
subsequent reinsurance years.
(1) The applicant must notify FCIC whether it intends to:
(i) Continue to maintain the policy or plan of insurance and charge
a user fee, as approved by the Board, to approved insurance providers
for all policies earning premium to cover maintenance expenses. It is
the sole responsibility of the applicant to collect such fees from the
approved insurance providers and any indebtedness for such fees must be
resolved by the applicant and approved insurance provider. Applicants
may request that FCIC provide the number of policies sold by each
approved insurance provider. Such information will be provided not later
than 90 days after such request is made or not later than 90 days after
the requisite information has been provided to FCIC by the approved
insurance provider, which ever is later; or
(ii) Transfer responsibility for maintenance to FCIC.
(2) If the applicant elects to:
(i) Transfer the policy or plan of insurance to FCIC, FCIC may, at
its sole discretion, elect to withdraw the availability of the policy or
plan of insurance or continue to maintain the policy or plan of
insurance; or
(ii) Continue to maintain the policy or plan of insurance, at the
time of the election, the applicant must submit a request for approval
of the user fee by the Board.
(3) Requests for approval of the user fee must be accompanied by
written documentation to support that the amount requested will only
cover maintenance costs.
(4) The Board will approve the amount of user fee that is payable to
the applicant by approved insurance providers unless the Board
determines that the user fee charged:
(i) Is unreasonable in relation to the maintenance costs associated
with the policy or plan of insurance; or
(ii) Unnecessarily inhibits the use of the policy or plan of
insurance by other approved insurance providers.
(5) Reasonableness of the user fees will be determined by the Board
based
[[Page 66]]
on a comparison with the amount of reimbursement for maintenance
previously received, the number of policies, the number of approved
insurance providers, and the expected total amount of user fees to be
received in any reinsurance year.
(6) A user fee unnecessarily inhibits the use of a policy or plan of
insurance if it is so high that other approved insurance providers are
unable to pay such fees because of the volume of business currently
underwritten by the approved insurance provider.
(7) The user fee charged to each approved insurance provider will be
considered payment in full for the use of such policy, plan of insurance
or rate of premium for the reinsurance year in which payment is made.
(l) The Board may consider information from the Equal Access to
Justice Act, 5 U.S.C. 504, the Bureau of Labor Statistic's Occupational
Employment Statistics Survey, the Bureau of Labor Statistic's Employment
Cost Index, and any other information determined applicable by the
Board, in making a determination whether to approve a submission for
reimbursement of research, development, or maintenance costs under this
section or the amount of reimbursement.
(m) For purposes of this section, rights to, or obligations of,
research and development reimbursement, maintenance cost reimbursement,
or user fees cannot be transferred from any individual or entity unless
specifically approved in writing by the Board.
Sec. 400.713 Non-Reinsured supplemental (NRS) policy.
(a) The reinsured company must submit three copies of the new or
revised NRS policy and related materials to the Deputy Administrator,
Research and Development (or successor), Risk Management Agency, 6501
Beacon Drive, Stop 0812, Kansas City, MO 64133-4676 for review, approval
or disapproval at least 90 days prior to the first sales closing date
applicable to the policy reinsured by FCIC.
(b) FCIC will approve the NRS policy if it does not increase or
shift risk to the underlying policy or plan of insurance reinsured by
FCIC, affect any rights of the insured with respect to the underlying
reinsured policy or plan of insurance, or cause disruption in the
marketplace for products reinsured by FCIC. Marketplace disruption
includes adversely affecting sales or administration of the underlying
reinsured policy, undermining producers' confidence in the Federal crop
insurance program, decreasing the producer's willingness or ability to
use Federally reinsured risk management products, or harming public
perception of the Federal crop insurance program.
(c) Failure to timely submit the NRS policy to FCIC will result in
the denial of reinsurance and subsidy for all policies reinsured by FCIC
for which the insured has obtained the NRS policy.
Subpart W [Reserved]
Subpart X_Interpretations of Statutory and Regulatory Provisions
Source: 63 FR 70313, Dec. 21, 1998, unless otherwise noted.
Sec. 400.765 Basis and applicability.
(a) The regulations contained in this subpart prescribe the rules
and criteria for obtaining a final agency determination of the
interpretation of any provision of the Act or the regulations
promulgated thereunder.
(b) Requesters may seek interpretations of those provisions of the
Act and the regulations promulgated thereunder that are in effect for
the crop year in which the request under this subpart is being made and
the three previous crop years.
(c) All final agency determinations issued by FCIC, and published in
accordance with Sec. 400.768(f ), will be binding on all participants
in the Federal crop insurance program.
[63 FR 70313, Dec. 21, 1998, as amended at 64 FR 50246, Sept. 16, 1999]
Sec. 400.766 Definitions.
Act. The Federal Crop Insurance Act, 7 U.S.C. 1501 et seq.
FCIC. The Federal Crop Insurance Corporation, a wholly owned
government corporation within the United States Department of
Agriculture.
[[Page 67]]
Participant. Any applicant for crop insurance, a producer with a
valid crop insurance policy, or a private insurance company with a
reinsurance agreement with FCIC or their agents, loss adjusters,
employees or contractors.
Regulations. All provisions contained in 7 CFR chapter IV.
Sec. 400.767 Requester obligations.
(a) All requests for a final agency determination under this subpart
must:
(1) Be submitted, in writing by certified mail to the Associate
Administrator, Risk Management Agency, United States Department of
Agriculture, Stop Code 0801, 1400 Independence Avenue, SW., Washington,
DC 20250-0801, facsimile at (202) 690-5879 or by electronic mail at
RMA533@wdc.fsa.usda.gov;
(2) State that it is being submitted under section 506(s) of the
Act;
(3) Identify and quote the specific provision in the Act or
regulations for which a final agency determination is requested;
(4) State the crop year for which the interpretation is sought;
(5) State the name, address, and telephone number of a contact
person affiliated with the request; and
(6) Contain the requester's detailed interpretation of the
regulation.
(b) The requestor must advise FCIC if the request for a final agency
determination will be used in a lawsuit or the settlement of a claim.
(c) Each request for final agency determination under this subpart
must contain no more than one request for an agency interpretation.
[63 FR 70313, Dec. 21, 1998, as amended at 64 FR 50246, Sept. 16, 1999]
Sec. 400.768 FCIC obligations.
(a) FCIC will not interpret any specific factual situation or case,
such as actions of any participant under the terms of a policy or any
reinsurance agreement.
(b) If, in the sole judgement of FCIC, the request is unclear,
ambiguous, or incomplete, FCIC will not provide an interpretation, but
will notify the requester that the request is unclear, ambiguous or
incomplete, within 30 days of such request.
(c) FCIC will provide a final determination of the interpretation to
a request that meets all the conditions stated herein to the requester
in writing, and at FCIC's discretion in the format in which it was
received, within 90 days of the date of receipt by FCIC.
(d) If a requestor is notified that a request is unclear, ambiguous
or incomplete under section 400.768(b), the time to respond will be
tolled from the date FCIC notifies the requestor until the date that
FCIC receives a clear, complete, and unambiguous request.
(e) If a response is not provided within 90 days, the requestor may
assume the interpretation provided is correct for the applicable crop
year.
(f) All agency final determinations will be published by FCIC as
specially numbered documents on the RMA Internet website.
(g) All final agency determinations are considered matters of
general applicability that are not appealable to the National Appeals
Division. Before obtaining judicial review of any final agency
determination, the person must obtain an administratively final
determination from the Director of the National Appeals division on the
issue of whether the final agency determination is a matter of general
applicability.
PART 401 [RESERVED]
PART 402_CATASTROPHIC RISK PROTECTION ENDORSEMENT--Table of Contents
Sec.
402.1 General statement.
402.2 Applicability.
402.3 OMB control numbers.
402.4 Catastrophic Risk Protection Endorsement Provisions.
Authority: 7 U.S.C. 1506(l) and 1506(p).
Source: 61 FR 42985, Aug. 20, 1996, unless otherwise noted.
Sec. 402.1 General statement.
The Federal Crop Insurance Act, as amended by the Federal Crop
Insurance Reform Act of 1994, requires the Federal Crop Insurance
Corporation to implement a catastrophic risk protection plan of
insurance that provides a basic level of insurance coverage to protect
[[Page 68]]
producers in the event of a catastrophic crop loss due to loss of yield
or prevented planting, if provided by the Corporation, provided the crop
loss or prevented planting is due to an insured cause of loss specified
in the crop insurance policy. This Catastrophic Risk Protection
Endorsement is a continuous endorsement that is effective in conjunction
with a crop insurance policy for the insured crop. Catastrophic risk
protection coverage will be offered through approved insurance providers
if there are a sufficient number available to service the area. If there
are an insufficient number available, as determined by the Secretary,
local offices of the Farm Service Agency will provide catastrophic risk
protection coverage.
Sec. 402.2 Applicability.
This Catastrophic Risk Protection Endorsement is applicable to each
crop for which catastrophic risk protection coverage is available and
for which the producer elects such coverage.
Sec. 402.3 OMB control numbers.
The information collection activity associated with this rule has
been approved by the Office of Management and Budget (OMB) pursuant to
the Paperwork Reduction Act of 1995 (44 U.S.C. chapter 35) under OMB
control number 0563-0053.
[61 FR 42985, Aug. 20, 1996, as amended at 69 FR 48730, Aug. 10, 2004]
Sec. 402.4 Catastrophic Risk Protection Endorsement Provisions.
The Catastrophic Risk Protection Endorsement Provisions for the 2005
and succeeding crop years are as follows:
Department of Agriculture
Federal Crop Insurance Corporation
Catastrophic Risk Protection Endorsement
(This is a continuous endorsement)
If a conflict exists between this Endorsement and any of the
policies specified in section 2 or the Special Provisions for the
insured crop, this endorsement will control.
Terms and Conditions
1. Definitions
Approved insurance provider. A private insurance company, including
its agents, that has been approved and reinsured by FCIC to provide
insurance coverage to producers participating in the Federal Crop
Insurance program.
Approved yield. The amount of production per acre computed in
accordance with FCIC's actual production history program (7 CFR part
400, subpart G) or for crops not included under 7 CFR part 400, subpart
G, the yield used to determine the guarantee in accordance with the Crop
Provisions or the Special Provisions, and any adjustments elected in
accordance with section 36 of the Basic Provisions.
County. The political subdivision of a state listed in the actuarial
table and designated on your accepted application, including land in an
adjoining county, provided such land is part of a field that extends
into the adjoining county and the county boundary is not readily
discernable. For peanuts and tobacco, the county will also include any
land identified by a FSA farm serial number for the county but
physically located in another county.
Crop of economic significance. A crop that has either contributed in
the previous crop year, or is expected to contribute in the current crop
year, ten percent (10%) or more of the total expected value of your
share of all crops grown in the county. However, a crop will not be
considered a crop of economic significance if the expected liability
under the Catastrophic Risk Protection Endorsement is equal to or less
than the administrative fee required for the crop.
Expected market price. (price election) The price per unit of
production (or other basis as determined by FCIC) anticipated during the
period the insured crop normally is marketed by producers. This price
will be set by FCIC before the sales closing date for the crop. The
expected market price may be less than the actual price paid by buyers
if such price typically includes remuneration for significant amounts of
post-production expenses such as conditioning, culling, sorting,
packing, etc.
FCIC. The Federal Crop Insurance Corporation, a wholly owned
Government Corporation within USDA.
FSA. The Farm Service Agency, an agency of the United States
Department of Agriculture or any successor agency.
Household. A domestic establishment including the members of a
family (parents, brothers, sisters, children, spouse, grandchildren,
aunts, uncles, nieces, nephews, first cousins, or grandparents, related
by blood, adoption or marriage, are considered to be family members) and
others who live under the same roof.
[[Page 69]]
Insurance is available. When crop information is contained in the
county actuarial documents for a particular crop.
Limited resource farmer. A person with:
(1) Direct or indirect gross farm sales not more than $100,000.00 in
each of the previous two years (to be increased starting in fiscal year
2004 to adjust for inflation using Prices Paid by Farmer Index as
compiled by National Agricultural Statistical Service (NASS)); and
(2) A total household income at or below the national poverty level
for a family of four, or less than 50 percent of county median household
income in each of the previous two years (to be determined annually
using Commerce Department Data).
Linkage requirement. The legal requirement that a producer must
obtain at least catastrophic risk protection coverage for any crop of
economic significance as a condition of receiving benefits for such crop
from certain other USDA programs in accordance with section 12(e),
unless the producer executes a waiver of any eligibility for emergency
crop loss assistance in connection with the crop.
Secretary. The Secretary of the United States Department of
Agriculture.
USDA. The United States Department of Agriculture.
Zero acreage report. An acreage report filed by you that certifies
you do not have a share in the crop for that crop year.
2. Eligibility, Life of Policy, Cancellation, and Termination
(a) You must have one of the following policies in force to elect
this Endorsement:
(1) The General Crop Insurance Policy (7 CFR 401.8) and crop
endorsement;
(2) The Common Crop Insurance Policy (7 CFR 457.8) and crop
provisions;
(3) The Group Risk Plan Policy, if available for catastrophic risk
protection; or
(4) A specific named crop insurance policy.
(b) You must have made application for catastrophic risk protection
on or before the sales closing date for the crop in the county.
(c) You must be a ``person'' as defined in the crop policy to be
eligible for catastrophic risk protection coverage.
3. Unit Division
(a) This section is in lieu of the unit provisions specified in the
applicable crop policy.
(b) For catastrophic risk protection coverage, a unit will be all
insurable acreage of the insured crop in the county on the date coverage
begins for the crop year:
(1) In which you have one hundred percent (100%) crop share; or
(2) Which is owned by one person and operated by another person on a
share basis.
(Example: If, in addition to the land you own, you rent land from five
landlords, three on a crop share basis and two on a cash basis, you
would be entitled to four units; one for each crop share lease and one
that combines the two cash leases and the land you own.)
(c) Further division of the units described in paragraph (b) above
is not allowed under this Endorsement.
4. Insurance Guarantees, Coverage Levels, and Prices for Determining
Indemnities
(a) Notwithstanding any provision contained in any other policy
document, for the 1995 through 1998 crop years, catastrophic coverage
will offer protection equal to fifty percent (50%) of your approved
yield indemnified at sixty percent (60%) of the expected market price,
or a comparable coverage as established by FCIC.
(b) Notwithstanding any provision contained in any other policy
document, for the 1999 and subsequent crop years, catastrophic coverage
will offer protection equal to fifty percent (50%) of your approved
yield indemnified at fifty-five percent (55%) of the expected market
price, or a comparable coverage as established by FCIC.
(c) If the crop policy denominates coverage in dollars per acre or
other measure, or any other alternative method of coverage, such
coverage will be converted to the amount of coverage that would be
payable at fifty percent (50%) of your approved yield indemnified at
sixty percent (60%) of the expected market price for the 1995 through
1998 crop years and fifty percent (50%) of your approved yield
indemnified at fifty-five percent (55%) of the expected market price for
the 1999 and subsequent crop years.
(d) You may elect catastrophic coverage for any crop insured or
reinsured by FCIC on either an individual yield and loss basis or an
area yield and loss basis, if both options are offered as set out in the
Actuarial Table or the Special Provisions.
(e) To be eligible for an indemnity under this endorsement you must
have suffered at least a 50 percent loss in yield.
5. Report of Acreage
(a) The report of crop acreage that you file in accordance with the
crop policy must be signed on or before the acreage reporting date. For
catastrophic risk protection, unless the other person with an insurable
interest in the crop objects in writing prior to the acreage reporting
date and provides a signed acreage report on their own behalf, the
operator may sign the acreage report for all other persons with an
insurable interest in the crop without a power of attorney. All persons
with an insurable interest in the crop, and for whom the operator
purports to sign and represent, are bound by the information contained
in that acreage report.
(b) For the purpose of determining the amount of indemnity only,
your share will
[[Page 70]]
not exceed your insurable interest at the earlier of the time of loss or
the beginning of harvest. Unless the accepted application clearly
indicates that insurance is requested for a partnership or joint
venture, insurance will only cover the crop share of the person
completing the application. The share will not extend to any other
person having an interest in the crop except as may otherwise be
specifically allowed in this endorsement. Any acreage or interest
reported by or for your spouse, child or any member of your household
may be considered your share. A lease containing provisions for both a
minimum payment (such as a specified amount of cash, bushels, pounds,
etc.) and a crop share will be considered a crop share lease. A lease
containing provisions for either a minimum payment (such as a specified
amount of cash, bushels, pounds, etc.,) or a crop share will be
considered a cash lease. Land rented for cash, a fixed commodity
payment, or any consideration other than a share in the insured crop on
such land will be considered as owned by the lessee.
6. Annual Premium and Administrative Fees
(a) Notwithstanding any provision contained in any other policy
document, you will not be responsible to pay a premium, nor will the
policy be terminated because the premium has not been paid. FCIC will
pay a premium subsidy equal to the premium established for the coverage
provided under this endorsement.
(b) In return for catastrophic risk protection coverage, you must
pay an administrative fee to the insurance provider within 30 days after
you have been billed by us, unless otherwise specified in 7 CFR part 400
(You will be billed by the date stated in the Special Provisions);
(1) The administrative fee owed is $100 for each crop in the county.
(2) Payment of an administrative fee will not be required if you
file a bona fide zero acreage report on or before the acreage reporting
date for the crop (if you falsely file a zero acreage report you may be
subject to criminal and administrative sanctions).
(c) The administrative fee provisions of paragraph (b) of this
section do not apply if you meet the definition of a limited resource
farmer (see section 1). The administrative fee will be waived if you
request it and:
(1) You qualify as a limited resource farmer; or
(2) You were insured prior to the 2005 crop year or for the 2005
crop year and your administrative fee was waived for one or more of
those crop years because you qualified as a limited resource farmer
under a policy definition previously in effect, and you remain qualified
as a limited resource farmer under the definition that was in effect at
the time the administrative fee was waived.
(d) When a crop policy has provisions to allow you the option to
separately insure individual crop types or varieties, you must pay a
separate administrative fee in accordance with paragraph (b) of this
section for each type or variety you elect to separately insure.
(e) If the administrative fee is not paid when due, you, and all
persons with an insurable interest in the crop under the same contract,
may be ineligible for certain other USDA program benefits as set out in
section 12, and all such benefits already received for the crop year
must be refunded.
7. Insured Crop
The crop insured is specified in the applicable crop policy,
however:
(a) Notwithstanding any other policy provision requiring the same
insurance coverage on all insurable acreage of the crop in the county,
if you purchase additional coverage for a crop, you may separately
insure acreage under catastrophic coverage that has been designated as
``high risk'' land by FCIC, provided that you execute a High Risk Land
Exclusion Option and obtain a catastrophic risk protection policy with
the same approved insurance provider, if available, on or before the
applicable sales closing date. If catastrophic coverage is not available
from the same insurance provider, you may obtain the catastrophic risk
protection policy for the high risk land from another approved insurance
provider or FSA, if available. You will be required to pay a separate
administrative fee for both the additional coverage policy and the
catastrophic coverage policy.
(b) A tobacco producer may insure one hundred percent (100%) of the
tobacco crop that is identified by a tobacco marketing card issued by
FSA for a specific producer and Farm Serial Number under one CAT policy,
provided the producer and other persons each have a share in the crop,
all the shareholders agree in writing to such arrangement, and none of
the persons hold any other interest in another tobacco crop for which
they are required to obtain at least catastrophic coverage. If the
tobacco crop is insured under one policy:
(1) The linkage requirements will be satisfied for each shareholder
of the crop; and
(2) The producer insuring the crop will:
(i) Make application for insurance and provide the name and social
security number, or employer identification number, of each person with
a share in the tobacco crop;
(ii) File the acreage report showing a one-hundred percent (100%)
share in the crop (all insurable acreage covered by such marketing card
will be considered as one unit);
(iii) Be responsible to pay the one administrative fee for all the
producers within the county;
(iv) Fulfill all requirements under the crop insurance contract; and
[[Page 71]]
(v) Receive any indemnity payment under his or her social security
number or employer identification number and distribute the indemnity
payments to the other persons sharing in the crop.
(c) A landowner will be allowed to obtain catastrophic coverage to
satisfy linkage requirements for all other landowners who hold an
undivided interest in the insurable acreage, provided:
(1) All the landowners must agree in writing to such arrangement and
have their social security number or employer identification number
listed on the application, without regard to the actual amount of their
interest in the insured acreage;
(2) All landowners must have an undivided interest in the insurable
acreage;
(3) None of the landowners may hold any share in other acreage for
which they are required to obtain at least catastrophic coverage;
(4) The total cumulative liability under the Catastrophic Risk
Protection Endorsement for all landowners must be $2,500 or less;
(5) The landowner insuring the crop will:
(i) Make application for insurance and provide the name and social
security number or employer identification number of each person with an
undivided interest in the insurable acreage;
(ii) Be responsible to pay the one administrative fee for all the
producers within the county;
(iii) Fulfill all requirements under the insurance contract; and
(iv) Receive any indemnity payment under the landowner's social
security number, or when applicable, employer identification number, and
distribute the indemnity payments to the other persons sharing in the
crop.
8. Replanting Payment
Notwithstanding any provision contained in any other crop insurance
document, no replant payment will be paid whether or not replanting of
the crop is required under the policy.
9. Claim for Indemnity
(a) If two or more insured crop types, varieties, or classes are
insured within the same unit, and multiple price elections are
applicable, the dollar amount of insurance and the dollar amount of
production to be counted will be determined separately for each type,
variety, class, etc., that have separate price elections and then
totaled to determine the total liability or dollar amount of production
to be counted for the unit.
(b) If you are eligible to receive an indemnity under this
endorsement and benefits compensating you for the same loss under any
other USDA program, you must elect the program from which you wish to
receive benefits. Only one payment or program benefit is allowed.
However, if other USDA program benefits are not available until after
you filed a claim for indemnity, you may refund the total amount of the
indemnity and receive the other program benefit. Notwithstanding the
first sentence of this subsection, farm ownership, operating, and
emergency loans may be obtained from the USDA in addition to an
indemnity under this endorsement.
10. Concealment or Fraud
Notwithstanding any provision contained in any other crop insurance
document, your CAT policy may be voided by us on all crops without
waiving any of our rights, including the right to collect any amounts
due:
(a) If at any time you conceal or misrepresent any material fact or
commit fraud relating to this or any other contract issued under the
authority of the Federal Crop Insurance Act with any insurance provider;
and
(b) The voidance will be effective as of the beginning of the crop
year during which such act or omission occurred. After the policy has
been voided, you must make a new application to obtain catastrophic risk
protection coverage for any subsequent crop year. If your policy is
voided under this section, any waiver of eligibility for emergency crop
loss assistance in connection with the crop will not be effective for
the crop for the year in which the voidance occurred.
11. Exclusion of Coverage
(a) Options or endorsements that extend the coverage available under
any crop policy offered by FCIC will not be available under this
endorsement, except the Late Planting Agreement Option. Written
agreements are not available for any crop insured under this
endorsement.
(b) Notwithstanding any provision contained in any other crop
policy, hail and fire coverage and high-risk land may not be excluded
under catastrophic risk protection.
12. Eligibility for Other USDA Program Benefits
(a) Even if it was a crop of economic significance for the previous
crop year, if you do not intend to plant the crop in the current crop
year, you do not have to obtain crop insurance or execute a waiver of
your eligibility for any emergency crop loss assistance in connection
with the crop to remain eligible for the USDA program benefits specified
in subsection (e). However, if, after the sales closing date, you plant
that crop, you will be unable to obtain insurance for that crop and you
must execute a waiver of
[[Page 72]]
your eligibility for emergency crop loss assistance in connection with
the crop to remain eligible for the USDA program benefits specified in
section 12(e). Failure to execute such a waiver will require you to
refund any benefits already received under a program specified in
section 12(e).
(b) You are initially responsible to determine the crops of economic
significance in the county. The insurance provider may assist you in
making these initial determinations. However, these determinations will
not be binding on the insurance provider. To determine the percentage
value of each crop:
(1) Multiply the acres planted to the crop, times your share, times
the approved yield, and times the price;
(2) Add the values of all crops grown by the producer in the county;
and
(3) Divide the value of the specific crop by the result of section
12(b)(2).
(c) You may use the type of price such as the current local market
price, futures price, established price, highest amount of insurance,
etc., for the price when calculating the value of each crop, provided
that you use the same type of price for all crops in the county.
(d) You may be required to justify the calculation and provide
adequate records to enable the insurance provider to verify whether a
crop is of economic significance.
(e) You must obtain at least catastrophic coverage for each crop of
economic significance in the county in which you have an insurable
share, if insurance is available in the county for the crop, unless you
execute a waiver of any eligibility for emergency crop loss assistance
in connection with the crop to be eligible for:
(1) Benefits under the Agricultural Market Transition Act;
(2) Loans or any other USDA provided farm credit, including:
guaranteed and direct farm ownership loans, operating loans, and
emergency loans under the Consolidated Farm and Rural Development Act
provided after October 13, 1994; and
(3) Benefits under the Conservation Reserve Program derived from any
new or amended application or contracts executed after October 13, 1994.
(f) Failure to comply with all provisions of the policy constitutes
a breach of contract and may result in ineligibility for certain other
farm program benefits for that crop year and any benefit already
received must be refunded. If you breach the insurance contract, the
execution of a waiver of any eligibility for emergency crop loss
assistance will not be effective for the crop year in which the breach
occurs.
[61 FR 42985, Aug. 20, 1996, as amended at 63 FR 40631, July 30, 1998;
64 FR 40740, July 28, 1999; 65 FR 40484, June 30, 2000; 69 FR 48730,
Aug. 10, 2004]
PARTS 403-406 [RESERVED]
PART 407_GROUP RISK PLAN OF INSURANCE REGULATIONS FOR THE 2005 AND
SUCCEEDING CROP YEARS--Table of Contents
Sec.
407.1 Applicability.
407.2 Availability of Federal crop insurance.
407.3 Premium rates, amounts of protection, and coverage levels.
407.4 OMB control numbers.
407.5 Creditors.
407.6 [Reserved]
407.7 The contract.
407.8 The application and policy.
407.9 Group risk plan common policy.
407.10 Group risk plan for barley.
407.11 Group risk plan for corn.
407.12 Group risk plan for cotton.
407.13 Group risk plan for forage.
407.14 Group risk plan for peanuts.
407.15 Group risk plan for sorghum.
407.16 Group risk plan for soybean.
407.17 Group risk plan for wheat.
Authority: 7 U.S.C. 1506(1), 1506(p).
Source: 64 FR 30219, June 7, 1999, unless otherwise noted.
Sec. 407.1 Applicability.
The provisions of this part are applicable only to those crops and
crop years for which a Crop Provision is contained in this part.
Sec. 407.2 Availability of Federal crop insurance.
(a) Insurance shall be offered under the provisions of this part on
the insured crop in counties within the limits prescribed by and in
accordance with the provisions of the Federal Crop Insurance Act, (7
U.S.C. 1501 et seq.) (the Act). The crops and counties shall be
designated by the Manager of the Federal Crop Insurance Corporation
(FCIC) from those approved by the Board of Directors of FCIC.
(b) The insurance will be offered through companies reinsured by
FCIC under the same terms and conditions as the contract contained in
this part. These contracts are clearly identified as being reinsured by
FCIC. Additionally, the contract contained in this part may be offered
directly to producers through agents of the United States Department of
Agriculture.
[[Page 73]]
Those contracts are specifically identified as being offered by FCIC.
(c) No person may have in force more than one insurance policy
issued or reinsured by FCIC on the same crop for the same crop year, in
the same county, unless specifically approved in writing by FCIC.
(d) Except as specified in paragraph (c) of this section, if a
person has more than one contract authorized under the Act that provides
coverage for the same loss on the same crop for the same crop year in
the same county, all such contracts shall be voided for that crop year
and the person will be liable for the premium on all contracts, unless
the person can show to the satisfaction of the Corporation that the
multiple contracts of insurance were without the fault of the person.
(1) If the multiple contracts of insurance are shown to be without
the fault of the person and:
(i) One contract is an additional coverage policy and the other
contract is a Catastrophic Risk Protection policy, the additional
coverage policy will apply if both policies are with the same insurance
provider, or if not, both insurance providers agree, and the
Catastrophic Risk Protection policy will be canceled (If the insurance
providers do not agree, the policy with the earliest date of application
will be in force and the other contract will be canceled); or
(ii) Both contracts are additional coverage policies or both are
Catastrophic Risk Protection policies, the contract with the earliest
signature date on the application will be valid and the other contract
on that crop in the county for that crop year will be canceled, unless
both policies are with the same insurance provider and the insurance
provider agrees otherwise or both policies are with different insurance
providers and both insurance providers agree otherwise.
(2) No liability for indemnity or premium will attach to the
contracts canceled as specified in paragraphs (d)(1)(i) and (ii) of this
section.
(e) The person must repay all amounts received in violation of this
section with interest at the rate contained in the contract (see Sec.
407.9, paragraph 15).
(f) A person whose contract with FCIC or with a company reinsured by
FCIC under the Act has been terminated because of violation of the terms
of the contract is not eligible to obtain crop insurance under the Act
with FCIC or with a company reinsured by FCIC unless the person can show
that the termination was improper and should not result in subsequent
ineligibility.
(g) All applicants for insurance under the Act must advise the
insurance provider, in writing at the time of application, of any
previous applications for insurance or contracts of insurance under the
Act within the last 5 years and the present status of any such
applications or insurance.
[64 FR 30219, June 7, 1999, as amended at 69 FR 48731, Aug. 10, 2004]
Sec. 407.3 Premium rates, amounts of protection, and coverage levels.
(a) The Manager of FCIC shall establish premium rates, amounts of
protection, and coverage levels for the insured crop that will be
included in the actuarial documents on file in the insurance provider's
office. Premium rates, amounts of protection, and coverage levels may be
changed from year to year.
(b) At the time the application for insurance is made, the person
must elect an amount of protection and a coverage level from among those
contained in the actuarial documents for the crop year.
Sec. 407.4 OMB control numbers.
The information collection activity associated with this rule has
been previously approved by the Office of Management and Budget (OMB)
under control number 0563-0053.
Sec. 407.5 Creditors.
An interest of a person in an insured crop existing by virtue of a
lien, mortgage, garnishment, levy, execution, bankruptcy, involuntary
transfer or other similar interest shall not entitle the holder of the
interest to any benefit under the contract.
[[Page 74]]
Sec. 407.6 [Reserved]
Sec. 407.7 The contract.
The insurance contract shall become effective upon the acceptance by
FCIC or the reinsured company of a complete, duly executed application
for insurance on a form prescribed or approved by FCIC. The contract
shall consist of the accepted application, Group Risk Plan of Insurance
Basic Provisions, Crop Provisions, Special Provisions, Actuarial Table,
and any amendments, endorsements, or options thereto. Changes made in
the contract shall not affect its continuity from year to year. No
indemnity shall be paid unless the person complies with all terms and
conditions of the contract. The forms required under this part and by
the contract are available at the office of the insurance provider, or
the local FSA office, if applicable.
[64 FR 30219, June 7, 1999, as amended at 69 FR 48731, Aug. 10, 2004]
Sec. 407.8 The application and policy.
(a) Application for insurance, on a form prescribed or approved by
FCIC, must be made by any person who wishes to participate in the
program in order to cover such person's share in the insured crop as
landlord, owner-operator, tenant, or other crop ownership interest. No
other person's interest in the crop may be insured under the
application. The application must be submitted to the insurance provider
on or before the applicable sales closing date on file in the insurance
provider's local office.
(b) FCIC or the reinsured company may reject or no longer accept
applications upon the FCIC's determination that the insurance risk is
excessive. The Manager of the Corporation is authorized in any crop year
to extend the sales closing date for submitting applications for fall
planted crops, unless prohibited by law, upon determining that the
probability and severity of claims will not increase because of the
extension, by placing the extended date on file in the insurance
provider's office and publishing a notice in the Federal Register. If
adverse conditions should develop during the extended period, the
Corporation will require the insurance provider to immediately
discontinue acceptance of applications.
(c) Since this Group Risk Plan differs significantly from
traditional Multiple Peril Crop Insurance, persons who purchase the
Group Risk Plan and their crop insurance agents will be required to
execute an ``Acknowledgment of Differences'' that explains that the
terms and conditions of the Group Risk Plan are different from
traditional crop insurance in that:
(1) The Group Risk Plan indemnity payment, if any, will be made
after the Group Risk Plan premium is received;
(2) A person may have a low yield on his or her individual farm and
not receive a payment under Group Risk Plan; and
(3) A person may not have any loss of production and still collect
under the policy if a loss of production is general in the area.
(4) By executing the ``Acknowledgment of Differences,'' the insured
certifies that:
(i) He or she understands the terms of the Group Risk Plan;
(ii) An MPCI policy may be available in the county; and
(iii) Both a Group Risk Plan and a MPCI Plan cannot be purchased on
the same crop by the same insured in the same county.
Sec. 407.9 Group risk plan common policy.
The provisions of the Group Risk Plan Common Policy for the 2005 and
succeeding crop years are as follows:
[FCIC policies]
Department of Agriculture
Federal Crop Insurance Corporation
Group Risk Plan Common Policy
[Reinsured policies]
(Appropriate title for insurance provider)
(This is a continuous policy. Refer to Section 18.)
[FCIC policies]
This insurance policy establishes a risk management program
developed by the Federal Crop Insurance Corporation (FCIC), an agency of
the United States Government, under the authority of the Federal Crop
Insurance Act (Act), as amended (7 U.S.C. 1501 et seq.). All terms of
the policy and rights and responsibilities of the parties thereto are
subject to the Act and all regulations under
[[Page 75]]
the Act published in 7 CFR chapter IV. The provisions of this policy may
not be waived or modified in any way by us, your insurance agent or any
employee of USDA unless the policy specifically authorizes a waiver or
modification by written agreement. Procedures (handbooks, manuals,
memoranda, and bulletins), issued by us and published on the RMA Web
site at http://www.rma.usda.gov/ or a successor Web site will be used in
the administration of this policy. All provisions of state and local
laws in conflict with the provisions of this policy as published at 7
CFR part 407 are preempted and the provisions of this policy control.
Throughout this policy, ``you'' and ``your'' refer to the person
shown on the accepted application and ``we,'' ``us,'' and ``our'' refer
to the Federal Crop Insurance Corporation. Unless the context indicates
otherwise, the use of the plural form of a word includes the singular
use and the singular form of the word includes the plural.
AGREEMENT TO INSURE: In return for the payment of the premium, and
subject to all of the provisions of this policy, we agree with you to
provide the insurance as stated in this policy. If there is a conflict
between the Act, the regulations published at 7 CFR chapter IV, and the
procedures issued by us, the order of priority is as follows: (1) The
Act; (2) the regulations; and (3) the procedures issued by us, with (1)
controlling (2), etc. If there is a conflict between the policy
provisions published at 7 CFR part 407 and the administrative
regulations published at 7 CFR part 400, the policy provisions published
at 7 CFR part 407 control. If a conflict exists among the policy
provisions, the order of priority is: (1) The Catastrophic Risk
Protection Endorsement, as applicable; (2) the Special Provisions; (3)
the Crop Provisions; and (4) these Basic Provisions, with (1)
controlling (2), etc.
[Reinsured policies]
This insurance policy establishes a risk management program
developed by the Federal Crop Insurance Corporation (FCIC), an agency of
the United States Government, under the authority of the Federal Crop
Insurance Act (Act), as amended (7 U.S.C. 1501 et seq.).
This insurance policy is reinsured by FCIC under the provisions of
the Act. All terms of the policy and rights and responsibilities of the
parties are subject to the Act and all regulations under the Act
published in 7 CFR chapter IV. The provisions of this policy may not be
waived or modified in any way by us, our insurance agent or any other
contractor or employee of ours or any employee of USDA unless the policy
specifically authorizes a waiver or modification by written agreement.
We will use the procedures (handbooks, manuals, memoranda, and
bulletins), as issued by FCIC and published on the RMA Web site at
http://www.rma.usda.gov/ or a successor Web site, in the administration
of this policy. All provisions of state and local laws in conflict with
the provisions of this policy as published at 7 CFR part 407 are
preempted and the provisions of this policy will control. In the event
that we cannot pay your loss because we are insolvent or are otherwise
unable to perform our duties under our reinsurance agreement with FCIC,
your claim will be settled in accordance with the provisions of this
policy and FCIC will be responsible for any amounts owed. No state
guarantee fund will be liable for your loss.
Throughout this policy, ``you'' and ``your'' refer to the person
shown on the accepted application and ``we,'' ``us,'' and ``our'' refer
to the reinsured company issuing this policy. Unless the context
indicates otherwise, the use of the plural form of a word includes the
singular use and the singular form of the word includes the plural.
AGREEMENT TO INSURE: In return for the payment of premium and
subject to all of the provisions of this policy, we agree with you to
provide risk protection as stated in this policy. If there is a conflict
between the Act, the regulations published at 7 CFR chapter IV, and the
procedures as issued by FCIC, the order of priority is as follows: (1)
The Act; (2) the regulations; and (3) the procedures as issued by FCIC,
with (1) controlling (2), etc. If there is a conflict between the policy
provisions published at 7 CFR part 407 and the administrative
regulations published at 7 CFR part 400, the policy provisions published
at 7 CFR part 407 control. If a conflict exists among the policy
provisions, the order of priority is: (1) the Catastrophic Risk
Protection Endorsement, as applicable; (2) the Special Provisions; (3)
the Crop Provisions; and (4) these Basic Provisions, with (1)
controlling (2), etc.
[Both policies]
The Group Risk Plan of Insurance (GRP) is designed as a risk
management tool to insure against widespread loss of production of the
insured crop in a county. It is primarily intended for use by those
producers whose farm yields tend to follow the average county yield. It
is possible for you to have a low yield on the acreage that you insure
and still not receive a payment under this plan.
For additional coverage you may select any percent coverage level
shown on the actuarial documents. Multiplying your coverage level
percent by the expected county yield shown on the actuarial documents
gives your trigger yield. If the payment yield that FCIC publishes for
the insured crop year falls below your trigger yield, you will receive a
payment.
On or before the sales closing date, you may select any dollar
amount of protection between 60 and 100 percent (except for Catastrophic
Risk Protection (CAT) which is 45 percent) of the maximum protection per
acre
[[Page 76]]
shown on the actuarial documents. This protection will be provided for
each acre of the crop planted by the acreage reporting date and shown on
your acreage report (unless otherwise provided in the crop provisions)
in which you have a share.
In accordance with the Act, FCIC will pay a portion of your premium,
as published in the actuarial documents. The premium rates, practices,
types, maximum protection per acre, and maximum subsidy per acre are
also shown on the actuarial documents.
FCIC will issue the payment yield in the calendar year following the
crop year insured. This yield will be the official estimated yield
published by the National Agricultural Statistics Service (NASS). You
will be paid if the payment yield falls below your trigger yield. The
amount of your payment per net insured acre will be calculated by
subtracting the payment yield from the trigger yield, dividing that
quantity by the trigger yield, and multiplying that result by your
protection per acre for each net acre that you have insured.
To be eligible to participate in the Group Risk Plan of Insurance
for any crop in any county, and to receive an indemnity thereunder, you
must have an insurable interest in an insured crop that is planted in
the county shown on the approved application. The crop must be planted
for harvest and be reported to us by the acreage reporting date. You may
only purchase coverage under the Group Risk Plan of Insurance on your
net acres of the insured crop.
The insurance contract shall become effective upon the acceptance by
us of a duly executed application for insurance on our form. Acceptance
occurs when we issue a Summary of Protection to you. The policy will
consist of the accepted application, these Basic Provisions, the Crop
Provisions, the Special Provisions, other applicable amendments,
endorsements or options, the actuarial documents for the insured
agricultural commodity, the Catastrophic Risk Protection Endorsement, if
applicable, and the applicable regulations published in 7 CFR chapter
IV. Insurance for each agricultural commodity in each county will
constitute a separate policy.
Terms and Conditions
Group Risk Plan of Insurance Basic Provisions
1. Definitions
Acreage report. A report required by section 7 of these Basic
Provisions that contains, in addition to other information, your report
of your share of all acreage of an insured crop in the county, whether
insurable or not insurable.
Acreage reporting date. The date contained in the Special Provisions
by which you must submit your acreage report in order to be eligible for
Group Risk Insurance.
Act. Federal Crop Insurance Act, (7 U.S.C. 1501 et seq.).
Actuarial documents. The material for the crop year which is
available for public inspection in your agent's office and published on
RMA's Web site at http://www.rma.usda.gov/ or a successor Web site, and
which shows the maximum protection per acre, expected county yield,
coverage levels, information needed to determine the premium rates,
practices, program dates, and other related information regarding crop
insurance in the county.
Additional coverage. For GRP, an amount of protection greater than
catastrophic risk protection. The protection is on a per acre basis as
specified in the actuarial documents for the crop, practice, and type.
Agricultural commodity. Any crop or other commodity produced,
regardless of whether or not it is insurable.
Agricultural experts. Persons who are employed by the Cooperative
State Research, Education and Extension Service or the agricultural
departments of universities, or other persons approved by FCIC, whose
research or occupation is related to the specific crop or practice for
which such expertise is sought.
Area. Land surrounding the insured acreage with geographic
characteristics, topography, soil types and climatic conditions similar
to the insured acreage.
Billing date. The date, contained in the actuarial documents, by
which we will bill you for the premium and administrative fee on the
insured crop.
Cancellation date. The calendar date specified in the Crop
Provisions on which insurance for the next crop year will automatically
renew unless the policy is canceled in writing by either you or us or
terminated in accordance with policy terms.
Catastrophic risk protection. The minimum level of coverage offered
by FCIC. For GRP, an amount of protection equal to 65 percent of the
expected county yield indemnified at 45 percent of the maximum
protection per acre specified in the actuarial documents for the crop,
practice, and type.
County. Any county, parish, or other political subdivision of a
state shown on your accepted application.
Certifying agent. A private or governmental entity accredited by the
USDA Secretary of Agriculture for the purpose of certifying a
production, processing or handling operation as organic.
Code of Federal Regulations (CFR). The codification of general and
permanent rules published in the Federal Register by the Executive
departments and agencies of the Federal Government. Rules published in
the Federal Register by FCIC are contained in 7 CFR chapter IV. The full
text of the CFR
[[Page 77]]
is available in electronic format at http://www.access.gpo.gov/ or a
successor Web site.
Contract change date. The calendar date by which changes to the
policy, if any, will be made available in accordance with section 19 of
these Basic Provisions.
Conventional farming practice. A system or process for producing an
agricultural commodity, excluding organic farming practices, that is
necessary to produce the crop that may be, but is not required to be,
generally recognized by agricultural experts for the area to conserve or
enhance natural resources and the environment.
Cover crop. A crop generally recognized by agricultural experts as
agronomically sound for the area for erosion control or other reasons
related to conservation or soil improvement. A cover crop may be
considered to be a second crop (see the definition of ``second crop'').
Crop practice. The combination of inputs such as fertilizer,
herbicide, and pesticide, and operations such as planting, cultivation,
and irrigation, used to produce the insured crop. The insurable
practices are contained in the actuarial documents.
Crop Provisions. The part of the policy that contains the specific
provisions of insurance for each insured crop.
Crop year. The period of time within which the insured crop is
normally grown and designated by the calendar year in which the crop is
normally harvested.
Delinquent debt. Any administrative fees or premiums for insurance
issued under the authority of the Act, and the interest on those
amounts, if applicable, that are not postmarked or received by us or our
agent on or before the termination date unless you have entered into an
agreement acceptable to us to pay such amounts or have filed for
bankruptcy on or before the termination date; any other amounts due us
for insurance issued under the authority of the Act (including, but not
limited to, indemnities found not to have been earned or that were
overpaid), and the interest on such amounts, if applicable, which are
not postmarked or received by us or our agent by the due date specified
in the notice to you of the amount due; or any amounts due under an
agreement with you to pay the debt, which are not postmarked or received
by us or our agent by the due dates specified in such agreement.
Dollar amount of protection per acre. The percentage of coverage
selected by you multiplied by the maximum protection per acre specified
in the actuarial documents for the crop, practice, and type. The dollar
amount of protection per acre is shown on your Summary of Protection.
Double crop. Producing two or more crops for harvest on the same
acreage in the same crop year.
Expected county yield. The yield contained in the actuarial
documents, on which your coverage for the crop year is based. This yield
is determined using historical NASS county average yields, as adjusted
by FCIC.
FCIC. The Federal Crop Insurance Corporation, a wholly owned
corporation within USDA.
First insured crop. With respect to a single crop year and any
specific crop acreage, the first instance that an agricultural commodity
is planted for harvest or prevented from being planted and is insured
under the authority of the Act. For example, if winter wheat that is not
insured is planted on acreage that is later planted to soybeans that are
insured, the first insured crop would be soybeans. If the winter wheat
was insured, it would be the first insured crop.
FSA. The Farm Service Agency, an agency of the United States
Department of Agriculture, or a successor agency.
Generally recognized. When agricultural experts or the organic
agricultural industry, as applicable, are aware of the production method
or practice and there is no genuine dispute regarding whether the
production method or practice allows the crop to make normal progress
toward maturity.
Good farming practices. The production methods utilized to produce
the insured crop and allow it to make normal progress toward maturity,
which are: (1) For conventional or sustainable farming practices, those
generally recognized by agricultural experts for the area; or (2) for
organic farming practices, those generally recognized by the organic
agricultural industry for the area or contained in the organic plan that
is in accordance with the National Organic Program published in 7 CFR
part 205. We may, or you may request us to, contact FCIC to determine
whether or not production methods will be considered to be ``good
farming practices.''
GRP. Group Risk Plan of Insurance.
Household. A domestic establishment including the members of a
family (parents, brothers, sisters, children, spouse, grandchildren,
aunts, uncles, nieces, nephews, first cousins, or grandparents, related
by blood, adoption or marriage, are considered to be family members) and
others who live under the same roof.
Insurable loss. Damage for which coverage is provided under the
terms of your policy, and for which you accept an indemnity payment.
Insurance provider. The FSA or a private insurance company approved
by FCIC which provides crop insurance coverage to producers
participating in any Federal crop insurance program administered under
the Act.
Limited resource farmer. A person with:
(1) Direct or indirect gross farm sales not more than $100,000.00 in
each of the previous two years (to be increased starting in fiscal year
2004 to adjust for inflation using Prices
[[Page 78]]
Paid by Farmer Index as compiled by NASS); and
(2) A total household income at or below the national poverty level
for a family of four, or less than 50 percent of county median household
income in each of the previous two years (to be determined annually
using Commerce Department Data).
Maximum protection per acre. The highest amount of protection
specified in the actuarial documents.
MPCI. Multiple peril crop insurance, an insurance product based on
an individual yield or amount of insurance.
NASS. National Agricultural Statistics Service, an agency within
USDA, or its successor, that publishes the official United States
Government yield estimates.
Net acres. The planted acreage of the insured crop multiplied by
your share.
Offset. The act of deducting one amount from another amount.
Organic agricultural industry. Persons who are employed by the
following organizations: Appropriate Technology Transfer for Rural
Areas, Sustainable Agriculture Research and Education or the Cooperative
State Research, Education and Extension Service, the agricultural
departments of universities, or other persons approved by FCIC, whose
research or occupation is related to the specific organic crop or
practice for which such expertise is sought.
Organic farming practice. A system of plant production practices
approved by a certifying agent in accordance with 7 CFR part 205.
Payment yield. The yield determined by FCIC based on NASS yields for
each insurable crop's type and practice, as adjusted by FCIC, and used
to determine whether an indemnity will be due.
Person. An individual, partnership, association, corporation,
estate, trust, or other legal entity, and wherever applicable, a state
or a political subdivision or agency of a state.
Replanted crop. The same agricultural commodity replanted on the
same acreage as the first insured crop for harvest in the same crop year
if the replanting is specifically made optional by the policy and you
elect to replant the crop and insure it under the policy covering the
first insured crop, or replanting is required by the policy.
Sales closing date. The date contained in the Special Provisions by
which an application must be filed. The last date by which you may
change your crop insurance coverage for a crop year.
Second crop. With respect to a single crop year, the next occurrence
of planting any agricultural commodity for harvest following a first
insured crop on the same acreage. The second crop may be the same or a
different agricultural commodity as the first insured crop, except the
term does not include a replanted crop. A cover crop, planted after a
first insured crop and planted for the purpose of haying, grazing or
otherwise harvesting in any manner or that is hayed or grazed during the
crop year, or that is otherwise harvested is considered to be a second
crop. A cover crop that is covered by FSA's noninsured crop disaster
assistance program (NAP) or receives other USDA benefits associated with
forage crops will be considered as planted for the purpose of haying,
grazing or otherwise harvesting. A crop meeting the conditions stated
herein will be considered to be a second crop regardless of whether or
not it is insured.
Share. Your percentage of interest in the insured crop, as an owner,
operator, or tenant at the time insurance attaches. Premium will be
determined on your share as of the acreage reporting date. However, only
for the purpose of determining the amount of indemnity, your share will
not exceed your share at the acreage reporting date or on the date of
harvest, whichever is less.
Special provisions. The part of the policy that contains specific
provisions of insurance for each crop that may vary by geographic area.
Subsidy. The portion of your premium, shown on the actuarial
documents, that FCIC will pay in accordance with the Act.
Substantial beneficial interest. An interest held by any person of
at least 10 percent in you. The spouse of any individual applicant or
individual insured will be considered to have a substantial beneficial
interest in the applicant or insured unless the spouses can prove they
are legally separated or otherwise legally separate under state law. Any
child of an individual applicant or individual insured will not be
considered to have a substantial beneficial interest in the applicant or
insured unless the child has a separate legal interest in such person.
For example, there are two partnerships that each have a 50 percent
interest in you and each partnership is made up of two individuals, each
with a 50 percent share in the partnership. In this case, each
individual would be considered to have a 25 percent interest in you, and
both the partnerships and the individuals would have a substantial
beneficial interest in you (The spouses of the individuals would not be
considered to have a substantial beneficial interest unless the spouse
was one of the individuals that made up the partnership). However, if
each partnership is made up of six individuals with equal interests,
then each would only have an 8.33 percent interest in you and although
the partnership would still have a substantial beneficial interest in
you, the individuals would not for the purposes of reporting in section
18.
Summary of protection. Our statement to you of the crop insured,
dollar amount of
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protection per acre, premiums, and other information obtained from your
accepted application, acreage report, and the actuarial documents.
Sustainable farming practice. A system or process for producing an
agricultural commodity, excluding organic farming practices, that is
necessary to produce the crop and is generally recognized by
agricultural experts for the area to conserve or enhance natural
resources and the environment.
Termination date. The calendar date contained in the Crop Provisions
upon which insurance ceases to be in effect because of nonpayment of any
amount due us under the policy, including premium and administrative
fees.
Trigger yield. The result of multiplying the expected county yield
by the coverage level percentage chosen by you. When the payment yield
falls below the trigger yield, an indemnity is due.
Type. Plants of the insured crop having common traits or
characteristics that distinguish them as a group or class, and which are
designated in the actuarial documents.
USDA. United States Department of Agriculture.
2. Insured Crop
The insured crop will be the crop shown on your accepted
application, as specified in the applicable Crop Provisions, and must be
grown on insurable acres.
3. Insured and Insurable Acreage
(a) The insurable acreage is all of the acreage of the insured crop
for which premium rates are provided by the actuarial documents and in
which you have a share and which is in the county listed in your
accepted application. The dollar amount of protection per acre, amount
of premium, and indemnity will be calculated separately for each county,
type, and practice.
(b) Only the acreage seeded to the insured crop on or before the
acreage reporting date (unless otherwise provided in the Crop
Provisions) and physically located in the county listed on your accepted
application will be insured. Crops grown on acreage physically located
in another county must be reported and insured separately.
(c) We will not insure any acreage:
(1) Where the crop was destroyed or put to another use during the
crop year for the purpose of conforming with, or obtaining a payment
under, any other program administered by the USDA;
(2) Where you have failed to follow good farming practices for the
insured crop; or
(i) Planted to a type, class or variety not generally recognized for
the area; or
(ii) Where the conditions under which the crop is planted are not
generally recognized for the area (For example, where agricultural
experts determine that planting a non-irrigated corn crop after a failed
small grain crop on the same acreage in the same crop year is not
appropriate for the area);
(3) Of a second crop, if you elect not to insure such acreage when
an indemnity for a first insured crop may be subject to reduction in
accordance with the provisions of section 21 and you intend to collect
an indemnity payment that is equal to 100 percent of the insurable loss
for the first insured crop acreage. This election must be made for all
first insured crop acreage that may be subject to an indemnity reduction
if the first insured crop is insured under this policy, or on a first
insured crop unit basis if the first insured crop is not insured under
this policy. For example, if the first insured crop under this policy
consists of 40 acres, or the first insured crop unit insured under
another policy contains 40 planted acres, then no second crop can be
insured on any of the 40 acres. In this case:
(i) If the first insured crop is insured under this policy, you must
provide written notice to us of your election not to insure acreage of a
second crop by the acreage reporting date for the second crop if it is
insured under this policy, or before planting the second crop if it is
insured under any other policy, or, if the first insured crop is not
insured under this policy, at the time the first insured crop acreage is
released by us (if no acreage in the first insured crop unit is
released, this election must be made by the earlier of the acreage
reporting date for the second crop or when you sign the claim for the
first insured crop), and if you fail to provide such notice, the second
crop acreage will be insured in accordance with applicable policy
provisions and you must repay any overpaid indemnity for the first
insured crop;
(ii) In the event a second crop is planted and insured with a
different insurance provider, or planted and insured by a different
person, you must provide written notice to each insurance provider that
a second crop was planted on acreage on which you had a first insured
crop; and
(iii) You must report the crop acreage that will not be insured on
the applicable acreage report; or
(4) Of a crop planted following a second crop or following an
insured crop that is prevented from being planted after a first insured
crop, unless it is a practice that is generally recognized by
agricultural experts or the organic agricultural industry for the area
to plant three or more crops for harvest on the same acreage in the same
crop year, and additional coverage insurance provided under the
authority of the Act is offered for the third or subsequent crop in the
same crop year. Insurance will only be provided for a third or
subsequent crop as follows:
[[Page 80]]
(i) You must provide records acceptable to us that show:
(A) You have produced and harvested the insured crop following two
other crops harvested on the same acreage in the same crop year in at
least two of the last four years in which you produced the insured crop;
or
(B) The applicable acreage has had three or more crops produced and
harvested on it in at least two of the last four years in which the
insured crop was grown on it; and
(ii) The amount of insurable acreage will not exceed 100 percent of
the greatest number of acres for which you provide the records required
in section 3(c)(4)(i)(A) or (B).
4. Policy Protection
(a) For catastrophic risk protection GRP policies, the dollar amount
of protection per acre will be 45 percent of the maximum protection per
acre specified on the actuarial documents for each insured crop,
practice, and type. For additional coverage GRP policies, you may select
any dollar amount of protection from 60 percent through 100 percent of
the maximum protection per acre shown on the actuarial documents for the
crop, practice, and type.
(b) The dollar amount of protection per acre, multiplied by your net
insured acreage, is your policy protection for each insured crop,
practice, and type specified in the actuarial documents.
(c) All yields are based on NASS determinations, and such
determinations for the county will be conclusively presumed to be
accurate.
5. Coverage Levels
(a) For catastrophic risk protection GRP policies, the coverage
level is shown on the actuarial documents for each insured crop,
practice, and type. For additional coverage GRP policies, you may select
any percentage of coverage shown on the actuarial documents for the
crop, practice, and type.
(b) Your coverage level multiplied by the expected county yield
shown on the actuarial documents is your trigger yield. If the payment
yield published by FCIC for the insured crop, practice, and type for the
insured crop year falls below your trigger yield, you will receive an
indemnity payment.
(c) You may change the coverage level or amount of protection for
each insured crop on or before the sales closing date. Changes must be
in writing and received by us by the sales closing date.
6. Payment Calculation Factor
Your payment calculation factor will be ((your trigger yield-payment
yield) / your trigger yield) for the purposes of calculating an
indemnity payment.
7. Report of Acreage and Share
(a) You must report on our form all acreage for each insured crop in
which you have a share (insurable and not insured) by practice and type
specified in the actuarial documents in each county listed on your
accepted application. This report must be submitted each year on or
before the acreage reporting date for the insured crop contained in the
actuarial documents. If you do not submit an acreage report by the
acreage reporting date, we will determine your acreage and share or deny
liability on the policy.
(b) We will not insure any acreage of the insured crop planted after
the acreage reporting date, unless otherwise provided in the Crop
Provisions.
(c) The premium amount and payment of an indemnity will be based on
your insurable acreage on the acreage reporting date subject to section
7(d).
(d) You must provide all required reports and you are responsible
for the accuracy of all information contained in those reports. You
should verify the information on all such reports prior to submitting
them to us.
(1) If you submit information on any report that is different than
what is determined to be correct and such information results in:
(i) A lower amount of policy protection than the correct amount, the
amount of policy protection will be reduced to an amount consistent with
the reported information; or
(ii) A higher amount of policy protection than the correct amount,
the information contained in the acreage report will be revised to be
consistent with the correct information.
(2) In addition to the other adjustments specified in section
7(d)(1), if you misreport any information that results in an amount of
policy protection greater than 110.0 percent or lower than 90.0 percent
of the correct amount of policy protection, any indemnity will be based
on the amount of policy protection determined in accordance with section
7(d)(1)(i) or (ii) and will be reduced in an amount proportionate with
the amount of policy protection that is misreported in excess of the
tolerances stated in this paragraph (For example, if the correct amount
of policy protection is determined to be $100.00, but you reported a
policy protection amount of $120.00, any indemnity will be reduced by
10.0 percent ($120.00 / $100.00 = 1.20, and 1.20 -1.10 = 0.10)).
(e) If you request an acreage measurement prior to the acreage
reporting date and submit documentation of such request and an acreage
report with estimated acreage by the acreage reporting date, you must
provide the measurement to us, we will revise your acreage report if
there is a discrepancy, and no indemnity will be paid until the acreage
measurement has been received by us (Failure to provide the measurement
to us will
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result in the application of section 7(d) if the estimated acreage is
not correct, and estimated acreage under this paragraph will no longer
be accepted for any subsequent acreage report).
(f) If there is an irreconcilable difference between:
(1) The acreage measured by FSA or a measuring service and our on-
farm measurement, our on-farm measurement will be used; or
(2) The acreage measured by a measuring service, other than our on-
farm measurement, and FSA, the FSA measurement will be used.
(g) Information on the initial acreage report will not be considered
misreported for the purposes of section 7(d) if the acreage report is
revised:
(1) In accordance with section 7(e) or (f);
(2) Because information is clearly transposed;
(3) When you provide adequate evidence that we or someone from USDA
have committed an error regarding the information; or
(4) As expressly permitted by the policy.
(h) If we discover you have incorrectly reported any information on
the acreage report for any crop year, you may be required to provide
documentation in subsequent crop years substantiating your report of
acreage for those crop years, including, but not limited to, an acreage
measurement service at your own expense. If the correction of any
misreported information would affect an indemnity that was paid in a
prior crop year, such claim will be adjusted and you will be required to
repay any overpaid amounts.
(i) You may insure only your share of the crop, which includes any
share of your spouse and dependent children unless it is demonstrated to
our satisfaction, prior to the sales closing date, that you and your
spouse maintain completely separate farming operations and that each
spouse is the operator of his or her own separate operation. Any
commingling of any part of the operations will cause shares of you and
your spouse to be combined.
8. Administrative Fees and Annual Premium
(a) If you obtain a catastrophic risk protection GRP policy, you
will pay an administrative fee, unless otherwise specified in 7 CFR part
400:
(1) Of $100 per crop per county;
(2) Payable to the insurance provider on the billing date for the
crop.
(b) If you obtain an additional coverage GRP policy, you will pay an
administrative fee:
(1) Of $30 per crop per county;
(2) Payable to the insurance provider on the billing date for the
crop.
(c) The administrative fee will be waived if you request it and:
(1) You qualify as a limited resource farmer; or
(2) You were insured prior to the 2005 crop year or for the 2005
crop year and your administrative fee was waived for one or more of
those crop years because you qualified as a limited resource farmer
under a policy definition previously in effect, and you remain qualified
as a limited resource farmer under the definition that was in effect at
the time the administrative fee was waived.
(d) For additional coverage GRP policies, your premium is determined
by multiplying your policy protection by the premium rate per hundred
dollars of protection for your coverage level contained in the actuarial
documents, by 0.01, and subtracting the applicable subsidy.
(e) For catastrophic risk protection and additional coverage GRP
policies, payment of an administrative fee will not be required if you
file a bona fide zero acreage report on or before the acreage reporting
date for the crop (if you falsely file a zero acreage report you may be
subject to criminal and administrative sanctions).
(f) The annual premium is earned and payable at the time the insured
crop is planted. For each insured crop, you will be billed for premium
and the administrative fee not earlier than the billing date specified
in the Special Provisions. Premium, administrative fee, and any other
amount owed us is due on the billing date and interest will accrue if
the premium, administrative fee, or any other amount owed is not
received by us before the first day of the month following the premium
billing date.
(g) If the amount of premium (gross premium less premium subsidy
paid on your behalf by FCIC) and administrative fee you are required to
pay for any acreage exceeds the amount of protection for the acreage,
coverage for those acres will not be provided (no premium or
administrative fee will be due and no indemnity will be paid for such
acreage).
9. Written Agreements
Terms of this policy which are specifically designated for the use
of written agreements may be altered by written agreement in accordance
with the following:
(a) You must apply in writing for each written agreement or for
renewal of any written agreement no later than the sales closing date,
unless you demonstrate your physical inability to submit the request
prior to the sales closing date (For example, you have been hospitalized
or a blizzard has made it impossible to submit the written agreement
request in person or by mail);
(b) The application for written agreement must contain all variable
terms of the contract between you and us that will be in effect if the
written agreement is not approved;
[[Page 82]]
(c) If approved by FCIC, the written agreement will include all
variable terms of the contract, including, but not limited to, crop
practice, and type or variety;
(d) Each written agreement will only be valid for the number of crop
years specified in the written agreement and a multi-year written
agreement:
(1) Will only apply for any particular crop year designated in the
written agreement if all terms and conditions in the written agreement
are still applicable for the crop year and the conditions under which
the written agreement has been provided have not changed prior to the
beginning of the crop year (If conditions change during or prior to a
crop year, the written agreement will not be effective for that crop
year but may still be effective for a subsequent crop year if conditions
under which the written agreement has been provided exist for such
year);
(2) May be canceled in writing by:
(i) FCIC not less than 30 days before the cancellation date if it
discovers that any term or condition of the written agreement, including
the premium rate, is not appropriate for the crop; or
(ii) You or us on or before the cancellation date;
(3) That is not renewed in writing after it expires, is not
applicable for a crop year, or is canceled, then insurance coverage will
be in accordance with the terms and conditions stated in this policy,
without regard to the written agreement; and
(4) Will be automatically cancelled if you transfer your policy to
another insurance provider (No notice will be provided to you and for
any subsequent crop year, for a written agreement to be effective, you
must timely request renewal of the written agreement in accordance with
this section);
(e) A request for any written agreement must contain:
(1) A completed ``Request for Actuarial Change'' form;
(2) Evidence from agricultural experts or the organic agricultural
industry, as applicable, that the crop can be produced in the area if
the request is to provide insurance for practices, types, or varieties
that are not insurable, unless we are notified in writing by FCIC that
such evidence is not required;
(3) The legal description of the land (in areas where legal
descriptions are available), FSA Farm Serial Number including tract
number, and a FSA aerial photograph, acceptable Geographic Information
System or Global Positioning System maps, or other legible maps
delineating field boundaries where you intend to plant the crop for
which insurance is requested; and
(4) Such other information as specified in the Special Provisions or
required by FCIC;
(f) A request for written agreement will not be accepted if:
(1) The request is submitted to us after the deadline contained in
section 9(a);
(2) All the information required in section 9(e) is not submitted to
us with the request for a written agreement (The request for a written
agreement may be accepted if any missing information is available from
other acceptable sources); or
(3) The request is to add land or crops to an existing written
agreement or to add land or crops to a request for a written agreement
and the request is not submitted by the deadlines specified in section
9(a);
(g) A request for a written agreement will be denied if:
(1) FCIC determines the risk is excessive;
(2) There is not adequate information available to establish an
actuarially sound premium rate and insurance coverage for the crop and
acreage; or
(3) Agricultural experts or the organic agricultural industry
determines the crop practices, types, or varieties are not generally
recognized for the county;
(h) A written agreement will be denied unless FCIC approves the
written agreement and the original written agreement is signed by you
and sent to us not later than the expiration date;
(i) With respect to your and our ability to reject an offer for a
written agreement:
(1) When a single Request for Actuarial Change form is submitted,
regardless of how many requests for changes are contained on the form,
you and we can only accept or reject the written agreement in its
entirety (you cannot reject specific terms of the written agreement and
accept others);
(2) When multiple Request for Actuarial Change forms are submitted,
regardless of when the forms are submitted, for the same condition, all
these forms may be treated as one request and you and we will only have
the option of accepting or rejecting the written agreement in its
entirety (you cannot reject specific terms of the written agreement and
accept others);
(3) When multiple Request for Actuarial Change forms are submitted,
regardless of when the forms are submitted, for the different conditions
or for different crops, separate agreements may be issued and you and we
will have the option to accept or reject each written agreement; and
(4) If we reject an offer for a written agreement approved by FCIC,
you may seek arbitration or mediation of our decision to reject the
offer in accordance with section 16;
(j) Any information that is submitted by you after the applicable
deadlines in section 9(a) will not be considered, unless such
information is specifically requested in accordance with section
9(e)(4);
(k) If the written agreement or the policy is canceled for any
reason, or the period for
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which an existing written agreement is in effect ends, a request for
renewal of the written agreement must contain all the information
required by this section and be submitted in accordance with section
9(a), unless otherwise specified by FCIC; and
(l) If a request for a written agreement is not approved by FCIC, a
request for a written agreement for any subsequent crop year that fails
to address the stated basis for the denial will not be accepted (If the
request for a written agreement contains the same information that was
previously rejected or denied, you will not have any right to arbitrate,
mediate or appeal the non-acceptance of your request).
10. Access to Insured Crop and Record Retention
(a) We, and any employee of USDA authorized to investigate or review
any matter relating to crop insurance, have the right to examine the
insured crop, any records relating to the crop and this insurance, and
any records regarding mediation, arbitration or litigation involving the
insured crop, at any location where such crop or records may be found or
maintained, as often as reasonably required during the record retention
period.
(b) You must retain, and provide upon our request, or the request of
any employee of USDA authorized to investigate or review any matter
relating to crop insurance, complete records pertaining to the planting
of the insured crop and your net acres for a period of three years after
the end of the crop year or three years after the date of final payment
of the indemnity, whichever is later. This requirement also applies to
all such records for acreage that is not insured.
(c) We, or any employee of USDA authorized to investigate or review
any matter relating to crop insurance, may extend the record retention
period beyond three years by notifying you of such extension in writing.
(d) By signing the application for insurance authorized under the
Act or by continuing insurance for which you have previously applied,
you authorize us or USDA, or any person acting for us or USDA authorized
to investigate or review any matter relating to crop insurance, to
obtain records relating to the planting, replanting, inputs, production,
harvesting, and disposition of the insured crop from any person who may
have custody of such records, including but not limited to, FSA offices,
banks, warehouses, gins, cooperatives, marketing associations, and
accountants. You must assist in obtaining all records we or any employee
of USDA authorized to investigate or review any matter relating to crop
insurance request from third parties.
(e) Failure to provide access to the insured crop or the farm,
maintain or provide any required records, authorize access to the
records maintained by third parties, or assist in obtaining all such
records will result in a determination that no indemnity is due for the
crop year in which such failure occurred.
11. Transfer of Coverage and Right to Indemnity
If you transfer any part of your share during the crop year, you may
transfer your coverage rights, if the transferee is eligible for crop
insurance. We will not be liable for any more than the liability
determined in accordance with your policy that existed before the
transfer occurred. The transfer of coverage rights must be on our form
and will not be effective until approved by us in writing. Both you and
the transferee are jointly and severally liable for payment of the
premium. The transferee has all rights and responsibilities under this
policy consistent with the transferee's interest.
12. Assignment of Indemnity
You may assign to another person your right to an indemnity for the
crop year. The assignment must be on our form and will not be effective
until approved in writing by us.
13. Other Insurance.
Nothing in this section prevents you from obtaining other insurance
not authorized under the Act. However, unless specifically required by
policy provisions, you must not obtain any other crop insurance
authorized under the Act on your share of the insured crop. If you
cannot demonstrate that you did not intend to have more than one policy
in effect, you may be subject to the consequences authorized under this
policy, the Act, or any other applicable statute. If you can demonstrate
that you did not intend to have more than one policy in effect (For
example, an application to transfer your policy or written notification
to an insurance provider that states you want to purchase, or transfer,
insurance and you want any other policies for the crop canceled would
demonstrate you did not intend to have duplicate policies), and:
(a) One is an additional coverage policy and the other is a
Catastrophic Risk Protection policy:
(1) The additional coverage policy will apply if both policies are
with the same insurance provider or, if not, both insurance providers
agree; or
(2) The policy with the earliest date of application will be in
force if both insurance providers do not agree; or
(b) Both are additional coverage policies or both are Catastrophic
Risk Protection policies, the policy with the earliest date of
application will be in force and the other policy will be void, unless
both policies are with:
[[Page 84]]
(1) The same insurance provider and the insurance provider agrees
otherwise; or
(2) Different insurance providers and both insurance providers agree
otherwise.
14. [Reserved]
[FCIC policy]
15. Restrictions, Limitations, and Amounts Due Us
(a) We may restrict the amount of acreage we will insure to the
amount allowed under any acreage limitation program established by USDA.
(b) Violation of Federal statutes including, but not limited to, the
Act; the controlled substance provisions of the Food Security Act of
1985; the Food, Agriculture, Conservation, and Trade Act of 1990; and
the Omnibus Budget Reconciliation Act of 1993, and any regulation
promulgated thereunder, will result in cancellation, termination, or
voidance of your crop insurance contract. We will recover any and all
monies paid to you or received by you during your period of
ineligibility, and your premium will be refunded, less an amount for
expenses and handling not to exceed 20 percent of the premium paid or to
be paid by you.
(c) Our maximum liability under this policy will be limited to the
policy protection specified in section 4 of this policy.
(d) We will pay simple interest computed on the net indemnity
ultimately found to be due by us or determined by a final judgment of a
court of competent jurisdiction or a final administrative determination
from, and including, the 61st day after the date we receive the NASS
county yield estimates for the insured crop year. Interest will be paid
only if the reason for our failure to timely pay is not due to your
failure to provide information or other material necessary for the
computation or payment of the indemnity. The interest rate will be that
established by the Secretary of the Treasury under section 12 of the
Contract Disputes Act of 1978 (41 U.S.C. 611 et seq.), and published in
the Federal Register.
(e) Any amount illegally or erroneously paid to you or that is owed
to us but is delinquent may be recovered by us through offset by
deducting it from any loan or payment due you under any Act of Congress
or program administered by any United States Government Agency, or by
other collection action.
(f) Interest will accrue at the rate not to exceed 1.25 percent
simple interest per calendar month, or any part thereof, on any unpaid
premium or administrative fee balance. For the purpose of premium and
administrative fee amounts due us, interest will begin to accrue on the
first day of the month following the premium billing date specified in
the Special Provisions.
(g) For the purpose of any other amounts due us, such as repayment
of indemnities found not to have been earned:
(1) Interest will start to accrue on the date that notice is issued
to you for the collection of the unearned amount;
(2) Amounts found due under this paragraph will not be charged
interest if payment is made in full within 30 days of issuance of the
notice by us;
(3) The amount will be considered delinquent if not paid within 30
days of the date the notice is issued by us;
(4) Penalties and interest will be charged in accordance with 31
U.S.C. 3717 and 4 CFR part 102; and
(5) The penalty for accounts more than 90 days delinquent is an
additional 6 percent per annum.
(h) Interest on any amount due us found to have been received by you
because of fraud, misrepresentation, or presentation by you of a false
claim will start on the date you received the amount with the additional
6 percent penalty beginning on the 31st day after the notice of amount
due is issued to you. This interest is in addition to any other amount
found to be due under any other Federal criminal or civil statute.
(i) If we determine that it is necessary to contract with a
collection agency, refer the debt to governmental collection centers,
the Department of Treasury Offset Program, or to employ an attorney to
assist in collection, you agree to pay all of the expenses of
collection.
(j) All amounts paid by you will be applied first to expenses of
collection if any, second to reduction of any penalties which may have
been assessed, then to reduction of accrued interest, and finally, to
reduction of the principal balance.
[Reinsured policy]
15. Restrictions, Limitations, and Amounts Due Us
(a) We may restrict the amount of acreage we will insure to the
amount allowed under any acreage limitation program established by USDA.
(b) Violation of Federal statutes including, but not limited to, the
Act; the controlled substance provisions of the Food Security Act of
1985; the Food, Agriculture, Conservation, and Trade Act of 1990; and
the Omnibus Budget Reconciliation Act of 1993, and any regulation
promulgated thereunder, will result in cancellation, termination, or
voidance of your crop insurance contract. We will recover any and all
monies paid to you or received by you during your period of
ineligibility, and your premium will be refunded, less a reasonable
amount for expenses and handling not to exceed 20 percent of the premium
paid or to be paid by you.
[[Page 85]]
(c) Our maximum liability under this policy will be limited to the
policy protection specified in section 4 of this policy.
(d) Interest will accrue at the rate not to exceed 1.25 percent
simple interest per calendar month, or any part thereof, on any unpaid
premium or administrative fee balance. For the purpose of premium and
administrative fee amounts due us, interest will begin to accrue on the
first day of the month following the premium billing date specified in
the Special Provisions.
(e) For the purpose of any amounts due us, such as repayment of
indemnities found not to have been earned, interest will start to accrue
on the date that notice is issued to you for the collection of the
unearned amount. Amounts found due under this paragraph will not be
charged interest if payment in full is made within 30 days of issuance
of notice by us. The amount will be considered delinquent if not paid in
full within 30 days of the date the notice is issued by us.
(f) All amounts paid will be applied first to expenses of collection
(see subsection (g) of this section) if any, second to reduction of
accrued interest, and then to reduction of the principal balance.
(g) If we determine that it is necessary to contract with a
collection agency or to employ an attorney to assist in collection, you
agree to pay all of the expenses of collection.
(h) A portion of the amount paid to you to which you were not
entitled may be collected through administrative offset from payments
you receive from United States government agencies in accordance with 31
U.S.C. chapter 37.
(i) We will pay simple interest computed on the net indemnity
ultimately found to be due by us or determined by a final judgment of a
court of competent jurisdiction or a final administrative determination
from, and including, the 61st day after the date we receive the NASS
county yield estimates for the insured crop year. Interest will be paid
only if the reason for our failure to timely pay is not due to your
failure to provide information or other material necessary for the
computation or payment of the indemnity. The interest rate will be that
established by the Secretary of the Treasury under section 12 of the
Contract Disputes Act of 1978 (41 U.S.C. 611 et seq.), and published in
the Federal Register.
[FCIC policy]
16. Appeals, Administrative and Judicial Review
(a) All determinations required by the policy will be made by us.
(b) If you disagree with our determinations, you may:
(1) Except for determinations specified in section 16(b)(2), obtain
an administrative review in accordance with 7 CFR part 400, subpart J or
appeal in accordance with 7 CFR part 11; or
(2) For determinations regarding whether you have used good farming
practices, request reconsideration in accordance with the
reconsideration process established for this purpose and published at 7
CFR part 400, subpart J.
(c) If you fail to exhaust your administrative remedies under 7 CFR
part 11 or the reconsideration process for determinations of good
farming practices described in section 16(b)(2), as applicable, you will
not be able to resolve the dispute through judicial review.
(d) If reconsideration for good farming practices under 7 CFR part
400, subpart J or appeal under 7 CFR part 11 has been initiated within
the time frames specified in those sections and judicial review is
sought, any suit against us must be:
(1) Filed not later than one year after the date of the decision
rendered in the reconsideration process for good farming practices or
administrative review process under 7 CFR part 11; and
(2) Brought in the United States district court for the district in
which the insured farm involved in the decision is located.
(e) You may only recover contractual damages from us. Under no
circumstances can you recover any attorney fees or other expenses, or
any punitive, compensatory or any other damages from us in
administrative review, appeal or litigation.
[Reinsured policy]
16. Mediation, Arbitration, Appeals, and Administrative and Judicial
Review
(a) If you and we fail to agree on any determination made by us
except those specified in section 16(d), the disagreement may be
resolved through mediation in accordance with section 16(g). If
resolution cannot be reached through mediation, or you and we do not
agree to mediation, the disagreement must be resolved through
arbitration in accordance with the rules of the American Arbitration
Association (AAA), except as provided in sections 16(c) and (f), and
unless rules are established by FCIC for this purpose. Any mediator or
arbitrator with a familial, financial or other business relationship to
you or us, or our agent or loss adjuster, is disqualified from hearing
the dispute.
(1) All disputes involving determinations made by us, except those
specified in section 16(d), are subject to mediation or arbitration.
However, if the dispute in any way involves a policy or procedure
interpretation, regarding whether a specific policy provision or
procedure is applicable to the situation, how it is applicable, or the
meaning of any policy provision or procedure, either you or we must
obtain an interpretation from FCIC in accordance with 7 CFR part 400,
subpart X or such other procedures as established by FCIC.
[[Page 86]]
(i) Any interpretation by FCIC will be binding in any mediation or
arbitration.
(ii) Failure to obtain any required interpretation from FCIC will
result in the nullification of any agreement or award.
(iii) An interpretation by FCIC of a policy provision is considered
a rule of general applicability and is not appealable. If you disagree
with an interpretation of a policy provision by FCIC, you must obtain a
Director's review from the National Appeals Division in accordance with
7 CFR 11.6 before obtaining judicial review in accordance with
subsection (e).
(iv) An interpretation by FCIC of a procedure may be appealed to the
National Appeals Division in accordance with 7 CFR part 11.
(2) Unless the dispute is resolved through mediation, the arbitrator
must provide to you and us a written statement describing the issues in
dispute, the factual findings, the determinations and the amount and
basis for any award and breakdown by claim for any award. The statement
must also include any amounts awarded for interest. Failure of the
arbitrator to provide such written statement will result in the
nullification of all determinations of the arbitrator. All agreements
reached through settlement, including those resulting from mediation,
must be in writing and contain at a minimum a statement of the issues in
dispute and the amount of the settlement.
(b) Regardless of whether mediation is elected:
(1) The initiation of arbitration proceedings must occur within one
year of the date we denied your claim or rendered the determination with
which you disagree, whichever is later;
(2) If you fail to initiate arbitration in accordance with section
16(b)(1) and complete the process, you will not be able to resolve the
dispute through judicial review;
(3) If arbitration has been initiated in accordance with section
16(b)(1) and completed, and judicial review is sought, suit must be
filed not later than one year after the date the arbitration decision
was rendered; and
(4) In any suit, if the dispute in any way involves a policy or
procedure interpretation, regarding whether a specific policy provision
or procedure is applicable to the situation, how it is applicable, or
the meaning of any policy provision or procedure, an interpretation must
be obtained from FCIC in accordance with 7 CFR part 400, subpart X or
such other procedures as established by FCIC. Such interpretation will
be binding.
(c) Any decision rendered in arbitration is binding on you and us
unless judicial review is sought in accordance with section 16(b)(3).
Notwithstanding any provision in the rules of the AAA, you and we have
the right to judicial review of any decision rendered in arbitration.
(d) If you do not agree with any determination made by us or FCIC
regarding whether you have used a good farming practice, you may request
reconsideration by FCIC of this determination in accordance with the
reconsideration process established for this purpose and published at 7
CFR part 400, subpart J (reconsideration).
(1) You must complete reconsideration before filing suit against
FCIC and any such suit must be brought in the United States district
court for the district in which the insured farm is located.
(2) Suit must be filed not later than one year after the date of the
decision rendered in the reconsideration.
(3) You cannot sue us for determinations of whether good farming
practices were used by you.
(e) Except as provided in section 16(d), if you disagree with any
other determination made by FCIC, you may obtain an administrative
review in accordance with 7 CFR part 400, subpart J (administrative
review) or appeal in accordance with 7 CFR part 11 (appeal). If you
elect to bring suit after completion of any appeal, such suit must be
filed against FCIC not later than one year after the date of the
decision rendered in such appeal. Under no circumstances can you recover
any attorney fees or other expenses, or any punitive, compensatory or
any other damages from FCIC.
(f) In any mediation, arbitration, appeal, administrative review,
reconsideration or judicial process, the terms of this policy, the Act,
and the regulations published at 7 CFR chapter IV, including the
provisions of 7 CFR part 400, subpart P, are binding. Conflicts between
this policy and any state or local laws will be resolved in accordance
with section 31. If there are conflicts between any rules of the AAA and
the provisions of your policy, the provisions of your policy will
control.
(g) To resolve any dispute through mediation, you and we must both:
(1) Agree to mediate the dispute;
(2) Agree on a mediator; and
(3) Be present, or have a designated representative who has
authority to settle the case present, at the mediation.
(h) Except as provided in section 16(i), no award or settlement in
mediation, arbitration, appeal, administrative review or reconsideration
process or judicial review can exceed the amount of liability
established or which should have been established under the policy,
except for interest awarded in accordance with section 15(i).
(i) In a judicial review only, you may recover attorneys fees or
other expenses, or any punitive, compensatory or any other damages from
us only if you obtain a determination from FCIC that we, our agent or
loss adjuster failed to comply with the terms of this policy or
procedures issued by FCIC and such failure resulted in you receiving a
[[Page 87]]
payment in an amount that is less than the amount to which you were
entitled. Requests for such a determination should be addressed to the
following: USDA/RMA/Deputy Administrator of Compliance/Stop 0806, 1400
Independence Avenue, SW., Washington, DC 20250-0806.
(j) If FCIC elects to participate in the adjustment of your claim,
or modifies, revises or corrects your claim, prior to payment, you may
not bring an arbitration, mediation or litigation action against us. You
must request administrative review or appeal in accordance with section
16(e).
17. Holidays and Weekends
If any date specified in this program falls on Saturday, Sunday, or
a legal Federal holiday, that date will be extended to the next business
day.
18. Life of Policy, Cancellation, and Termination
(a) This is a continuous policy and will remain in effect for each
crop year following the acceptance of the original application until
canceled by you in accordance with the terms of the policy or terminated
by operation of the terms of the policy or by us.
(b) Your application for insurance must contain your social security
number (SSN) if you are an individual or employer identification number
(EIN) if you are a person other than an individual, and all SSNs and
EINs, as applicable, of all persons with a substantial beneficial
interest in you, the coverage level, price election, crop, type,
variety, or class, plan of insurance, and any other material information
required on the application to insure the crop. If you or someone with a
substantial beneficial interest is not legally required to have a SSN or
EIN, you must request and receive an identification number for the
purposes of this policy from us or the Internal Revenue Service (IRS) if
such identification number is available from the IRS. If any of the
information regarding persons with a substantial beneficial interest
changes during the crop year, you must revise your application by the
next sales closing date applicable under your policy to reflect the
correct information.
(1) Applications that do not contain your SSN, EIN or identification
number, or any of the other information required in section 18(b) are
not acceptable and insurance will not be provided (Except if you fail to
report the SSNs, EINs or identification numbers of persons with a
substantial beneficial interest in you, the provisions in section
18(b)(2) will apply);
(2) If the application does not contain the SSNs, EINs or
identification numbers of all persons with a substantial beneficial
interest in you, you fail to revise your application in accordance with
section 18(b), or the reported SSNs, EINs or identification numbers are
incorrect and the incorrect SSN, EIN or identification number has not
been corrected by the acreage reporting date, and:
(i) Such persons are eligible for insurance, the amount of coverage
for all crops included on this application will be reduced
proportionately by the percentage interest in you of such persons, you
must repay the amount of indemnity that is proportionate to the interest
of the persons whose SSN, EIN or identification number was unreported or
incorrect for such crops, and your premium will be reduced
commensurately; or
(ii) Such persons are not eligible for insurance, except as provided
in section 18(b)(3), the policy is void and no indemnity will be owed
for any crop included on this application, and you must repay any
indemnity that may have been paid for such crops. If previously paid,
the balance of any premium and any administrative fees will be returned
to you, less twenty percent of the premium that would otherwise be due
from you for such crops. If not previously paid, no premium or
administrative fees will be due for such crops.
(3) The consequences described in section 18(b)(2)(ii) will not
apply if you have included an ineligible person's SSN, EIN or
identification number on your application and do not include the
ineligible person's share on the acreage report.
(c) After acceptance of the application, you may not cancel this
policy for the initial crop year. Thereafter, the policy will continue
in force for each succeeding crop year unless canceled or terminated as
provided below.
(d) Either you or we may cancel this policy after the initial crop
year by providing written notice to the other on or before the
cancellation date shown in the Crop Provisions.
(e) Any amount due to us for any policy authorized under the Act
will be offset from any indemnity due you for this or any other crop
insured with us.
(1) Even if your claim has not yet been paid, you must still pay the
premium and administrative fee on or before the termination date for you
to remain eligible for insurance.
(2) If we offset any amount due us from an indemnity owed to you,
the date of payment for the purpose of determining whether you have a
delinquent debt will be the date FCIC publishes the payment yield for
the applicable crop year.
(f) A delinquent debt for any policy will make you ineligible to
obtain crop insurance authorized under the Act for any subsequent crop
year and result in termination of all policies in accordance with
section 18(f)(2).
(1) With respect to ineligibility:
(i) Ineligibility for crop insurance will be effective on:
(A) The date that a policy was terminated in accordance with section
18(f)(2) for the
[[Page 88]]
crop for which you failed to pay premium, an administrative fee, or any
related interest owed, as applicable;
(B) The payment due date contained in any notification of
indebtedness for any overpaid indemnity, if you fail to pay the amount
owed, including any related interest owed, as applicable, by such due
date;
(C) The termination date for the crop year prior to the crop year in
which a scheduled payment is due under a payment agreement if you fail
to pay the amount owed by any payment date in any agreement to pay the
debt; or
(D) The termination date the policy was or would have been
terminated under sections 18(f)(2)(i)(A), (B) or (C) if your bankruptcy
petition is dismissed before discharge.
(ii) If you are ineligible and a policy has been terminated in
accordance with section 18(f)(2), you will not receive any indemnity,
and such ineligibility and termination of the policy may affect your
eligibility for benefits under other USDA programs. Any indemnity that
may be owed for the policy before it has been terminated will remain
owed to you, but may be offset in accordance with section 18(e), unless
your policy was terminated in accordance with sections 18(f)(2)(i)(D) or
(E).
(2) With respect to termination:
(i) Termination will be effective on:
(A) For a policy with unpaid administrative fees or premiums, the
termination date immediately subsequent to the billing date for the crop
year;
(B) For a policy with other amounts due, the termination date
immediately following the date you have a delinquent debt;
(C) For each policy for which the termination date has passed before
you become ineligible, the termination date immediately following the
date you become ineligible;
(D) For execution of an agreement to pay any amounts owed and
failure to make any scheduled payment, the termination date for the crop
year prior to the crop year in which you failed to make the scheduled
payment; or
(E) For dismissal of a bankruptcy petition before discharge, the
termination date the policy was or would have been terminated under
sections 18(f)(2)(i)(A), (B) or (C).
(ii) For all policies terminated under sections 18(f)(2)(i)(D) and
(E), any indemnities paid subsequent to the termination date must be
repaid.
(iii) Once the policy is terminated, it cannot be reinstated for the
current crop year unless the termination was in error. Failure to timely
pay because of illness, bad weather, or other such extenuating
circumstances is not grounds for reinstatement in the current crop year.
(3) To regain eligibility, you must:
(i) Repay the delinquent debt in full;
(ii) Execute an agreement to pay any amounts owed and make payments
in accordance with the agreement (We will not enter into an agreement
with you to pay the amounts owed if you have previously failed to make a
scheduled payment under the terms of any other agreement to pay with us
or any other insurance provider); or
(iii) File a petition to have your debts discharged in bankruptcy
(Dismissal of the bankruptcy petition before discharge will terminate
all policies in effect retroactive to the date your policy would have
been terminated in accordance with section 18(f)(2)(i));
(4) After you become eligible for crop insurance, if you want to
obtain coverage for your crops, you must submit a new application on or
before the sales closing date for the crop (Since applications for crop
insurance cannot be accepted after the sales closing date, if you make
any payment after the sales closing date, you cannot apply for insurance
until the next crop year);
(5) For example, for the 2003 crop year, if crop A, with a
termination date of October 31, 2003, and crop B, with a termination
date of March 15, 2004, are insured and you do not pay the premium for
crop A by the termination date, you are ineligible for crop insurance as
of October 31, 2003, and crop A's policy is terminated as of that date.
Crop B's policy does not terminate until March 15, 2004, and an
indemnity for the 2003 crop year may still be owed. If you enter an
agreement to repay amounts owed on September 25, 2004, the earliest date
by which you can obtain crop insurance for crop A is to apply for crop
insurance by the October 31, 2004, sales closing date and for crop B is
to apply for crop insurance by the March 15, 2005, sales closing date.
If you fail to make a payment that was scheduled to be made on April 1,
2005, your policy will terminate as of October 31, 2004, for crop A, and
March 15, 2005, for crop B, and no indemnity will be due for that crop
year for either crop. You will not be eligible to apply for crop
insurance for any crop until after the amounts owed are paid in full or
you file a petition to discharge the debt in bankruptcy.
(6) If you are determined to be ineligible under section 18(f),
persons with a substantial beneficial interest in you may also be
ineligible until you become eligible again.
(g) If you die, disappear, or are judicially declared incompetent,
or if you are an entity other than an individual and such entity is
dissolved, the policy will terminate as of the date of death, judicial
declaration, or dissolution. If such event occurs after coverage begins
for any crop year, the policy will continue in force through the crop
year and terminate at the end of the insurance period and any indemnity
will be paid to the person or persons determined to be beneficially
entitled to the indemnity. The premium will be deducted from the
indemnity or collected
[[Page 89]]
from the estate. Death of a partner in a partnership will dissolve the
partnership unless the partnership agreement provides otherwise. If two
or more persons having a joint interest are insured jointly, death of
one of the persons will dissolve the joint entity.
(h) We may cancel your policy if no premium is earned for 3
consecutive years.
(i) The cancellation and termination dates are contained in the Crop
Provisions.
19. Contract Changes
(a) We may change any terms and conditions of this policy from year
to year.
(b) Any changes in policy provisions, expected county yields,
maximum amounts of protection, premium rates, and program dates (except
as allowed herein) can be viewed on the RMA Web site at http://
www.rma.usda.gov/ or a successor Web site not later than the contract
change date contained in the Crop Provisions. We may only revise this
information after the contract change date to correct clear errors (For
example, the maximum amount of protection was announced at $2500.00 per
acre instead of $250.00 per acre).
(c) After the contract change date, all changes specified in section
19(b) will also be available upon request from your crop insurance
agent. You will be provided, in writing, a copy of the changes to the
Basic Provisions and Crop Provisions and a copy of the Special
Provisions not later than 30 days prior to the cancellation date for the
insured crop. Acceptance of the changes will be conclusively presumed in
the absence of notice from you to change or cancel your insurance
coverage.
20. Eligibility for Other Farm Program Benefits
To remain eligible for benefits under the Agriculture Marketing
Transition Act, the conservation reserve program, or certain farm loans,
you are required to obtain at least the catastrophic level of coverage
for either GRP or any other plan of insurance that is available in the
county, for all crops of economic significance, or execute a waiver of
your rights to any emergency crop assistance on or before the sales
closing date for the crop.
21. Indemnity and Premium Limitations.
(a) With respect to acreage where you are due a loss for your first
insured crop in the crop year, except in the case of double cropping
described in section 21(c):
(1) You may elect to not plant or to plant and not insure a second
crop on the same acreage for harvest in the same crop year and collect
an indemnity payment that is equal to 100 percent of the insurable loss
for the first insured crop; or
(2) You may elect to plant and insure a second crop on the same
acreage for harvest in the same crop year (you will pay the full premium
and if there is an insurable loss to the second crop, receive the full
amount of indemnity that may be due for the second crop, regardless of
whether there is a subsequent crop planted on the same acreage) and:
(i) Collect an indemnity payment that is 35 percent of the insurable
loss for the first insured crop;
(ii) Be responsible for a premium that is 35 percent of the premium
that you would otherwise owe for the first insured crop; and
(iii) If the second crop does not suffer an insurable loss:
(A) Collect an indemnity payment for the other 65 percent of
insurable loss that was not previously paid under section 21(a)(2)(i);
and
(B) Be responsible for the remainder of the premium for the first
insured crop that you did not pay under section 21(a)(2)(ii).
(b) The reduction in the amount of indemnity and premium specified
in section 21(a), as applicable, will apply:
(1) Notwithstanding the priority contained in the Agreement to
Insure section, which states that the Crop Provisions have priority over
the Basic Provisions when a conflict exists, to any premium owed or
indemnity paid in accordance with the Crop Provisions, and any
applicable endorsement.
(2) Even if another person plants the second crop on any acreage
where the first insured crop was planted.
(3) If you fail to provide any records we require to determine
whether an insurable loss occurred for the second crop.
(c) You may receive a full indemnity for a first insured crop when a
second crop is planted on the same acreage in the same crop year,
regardless of whether or not the second crop is insured or sustains an
insurable loss, if each of the following conditions are met:
(1) It is a practice that is generally recognized by agricultural
experts or the organic agricultural industry for the area to plant two
or more crops for harvest in the same crop year;
(2) The second or more crops are customarily planted after the first
insured crop for harvest on the same acreage in the same crop year in
the area;
(3) Additional coverage insurance offered under the authority of the
Act is available in the county on the two or more crops that are double
cropped; and
(4) You provide records acceptable to us of acreage and production
that show you have double cropped acreage in at least two of the last
four crop years in which the first insured crop was planted, or that
show the applicable acreage was double cropped in at least two of the
last four crop years in which the first insured crop was grown on it.
[[Page 90]]
(d) The receipt of a full indemnity on both crops that are double
cropped is limited to the number of acres for which you can demonstrate
you have double cropped or that have been historically double cropped as
specified in section 21(c).
An Example To Demonstrate How GRP Works
Producer A buys 90 percent coverage and selects $160 protection per
acre. Producer B buys 75 percent coverage and selects $185 protection
per acre. Both producers have 100 percent share and both plant 200 acres
of a crop in the county. The expected county yield is 45 bushels per
acre. The premium rate for 90 percent coverage is $6.14 per hundred
dollars of protection and the premium rate for 75 percent coverage is
$3.30 per hundred dollars of protection.
A's trigger yield is 40.5 bushels per acre (90% x 45), and the total
premium due is $1,965 ($160 x $6.14 x 200 acres x 0.01). Of that amount,
FCIC pays $614 (200 acres x the maximum subsidy of $3.07 per acre). A's
policy protection is $32,000 ($160 x 200 acres).
B's trigger yield is 33.8 bushels per acre (75% of 45), and the
total premium due is $1,221 ($185 x $3.30 x 200 acres x 0.01). Of that
amount, FCIC pays $442 (200 acres x the subsidy amount of $2.21 per
acre). B's policy protection is $37,000 ( $185 x 200 acres).
Scenario 1 (likely)
FCIC issues a payment yield of 46 bushels per acre. This is above
both producers' trigger yields, so no indemnity payment is made, even if
one or both have individual yields that are below the trigger yield.
Scenario 2 (less likely)
FCIC issues a payment yield of 38 bushels per acre. A's payment
calculation factor is 0.062 ((40.5 - 38) / 40.5). This number multiplied
by the policy protection yields an indemnity payment of $1,984 (.062 x
$32,000). B's trigger yield is less than the payment yield, so no
indemnity payment is made.
Scenario 3 (least likely)
FCIC issues a payment yield of 22 bushels per acre. A's payment
calculation factor is 0.457 ((40.5 - 22) / 40.5). The payment is $14,624
(0.457 x $32,000). B's payment calculation factor is 0.349 ((33.8 - 22)
/ 33.8), and the final indemnity payment is $12,913 (0.349 x $37,000).
[64 FR 30219, June 7, 1999, as amended at 65 FR 40485, June 30, 2000; 68
FR 37721, June 25, 2003; 69 FR 48731, Aug. 10, 2004]
Sec. 407.10 Group risk plan for barley.
The provisions of the Group Risk Plan for Barley for the 2000 and
succeeding crop years are as follows:
1. Definitions
Harvest. Combining or threshing the barley for grain.
NASS yield. The yield calculated by dividing the NASS estimate of
the barley production in the county, by the NASS estimate of the acres
of barley in the county, as specified in the actuarial documents. The
actuarial documents will specify whether harvested or planted acreage is
used to calculate the yield used to establish the expected county yield
and calculate indemnities.
Planted acreage. Land in which the barley seed has been placed by a
machine appropriate for the insured crop and planting method, at the
correct depth, into a seedbed that has been properly prepared for the
planting method and production practice. Land on which seed is initially
spread onto the soil surface by any method and which subsequently is
mechanically incorporated into the soil in a timely manner and at the
proper depth, will also be considered planted.
2. Crop Insured
The insured crop will be all barley:
(a) Grown on insurable acreage in the county or counties listed in
the accepted application;
(b) Properly planted and reported by the acreage reporting date;
(c) Planted with the intent to be harvested as grain; and
(d) Not planted into an established grass or legume, interplanted
with another crop, or planted as a nurse crop, unless seeded at the
normal rate and intended for harvest as grain.
3. Payment
(a) A payment will be made only if the payment yield for the insured
crop year is less than your trigger yield.
(b) Payment yields will be determined prior to the April 1 following
the crop year.
(c) We will issue any payment to you prior to the May 1 immediately
following our determination of the payment yield.
(d) The payment is equal to the payment calculation factor
multiplied by your policy protection for each insured crop practice and
type specified in the actuarial documents.
(e) The payment will not be recalculated even though the NASS yield
may be subsequently revised.
4. Program Dates
[[Page 91]]
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State and county Cancellation and termination dates Contract change date
----------------------------------------------------------------------------------------------------------------
Kit Carson, Lincoln, Elbert, El Paso, September 30......................... June 30.
Pueblo, Las Animas Counties, Colorado and
all Colorado Counties south and east
thereof; all New Mexico counties except
Taos County; Kansas; Missouri; Illinois;
Indiana; Ohio; Pennsylvania; New York;
Massachusetts; and all states south and
east thereof.
Arizona; California; and Clark and Nye October 31........................... June 30.
Counties, Nevada.
All Colorado counties except Kit Carson, March 15............................. November 30.
Lincoln, Elbert, El Paso, Pueblo, and Las
Animas Counties and all Colorado counties
south and east thereof; all Nevada
counties except Clark and Nye Counties;
Taos County, New Mexico; and all other
states except: Arizona, California, and
(except) Kansas, Missouri, Illinois,
Indiana, Ohio, Pennsylvania, New York,
and Massachusetts and all States south
and east thereof.
----------------------------------------------------------------------------------------------------------------
Sec. 407.11 Group risk plan for corn.
The provisions of the Group Risk Plan for Corn for the 2000 and
succeeding crop years are as follows:
1. Definitions
Harvest. Combining or picking corn for grain, or severing the stalk
from the land and chopping the stalk and ear for the purpose of
livestock feed.
NASS yield. The yield calculated by dividing the NASS estimate of
the corn for grain production in the county, by the NASS estimate of the
acres of corn for grain in the county, as specified in the actuarial
documents. The actuarial documents will specify whether harvested or
planted acreage is used to calculate the yield used to establish the
expected county yield and calculate indemnities.
Planted acreage. Land in which the corn seed has been placed by a
machine appropriate for the insured crop and planting method, at the
correct depth, into a seedbed that has been properly prepared for the
planting method and production practice. Broadcast and subsequent
mechanical incorporation of the corn seed is not allowed.
2. Crop Insured
(a) The insured crop will be all field corn:
(1) Grown on insurable acreage in the county listed in the accepted
application;
(2) Properly planted and reported by the acreage reporting date;
(3) Planted with the intent to be harvested as grain, silage, or
green chop; and
(4) Not planted into an established grass or legume or interplanted
with another crop.
(b) Hybrid seed corn, popcorn, sweet corn, and other specialty corn
may only be insured if a written agreement exists between you and us.
Your request to insure such crop must be in writing and submitted to
your agent not later than the sales closing date.
3. Payment
(a) A payment will be made only if the payment yield for the insured
crop year is less than your trigger yield.
(b) Payment yields will be determined prior to April 16 following
the crop year.
(c) We will issue any payment to you prior to the May 16 immediately
following our determination of the payment yield.
(d) The payment is equal to the payment calculation factor
multiplied by your policy protection for each insured crop practice and
type specified in the actuarial documents.
(e) The payment will not be recalculated even though the NASS yield
may be subsequently revised.
4. Program Dates
----------------------------------------------------------------------------------------------------------------
State and county Cancellation and termination dates Contract change date
----------------------------------------------------------------------------------------------------------------
Val Verde, Edwards, Kerr, Kendall, Bexar, January 15........................... November 30.
Wilson, Karnes, Goliad, Victoria, and
Jackson Counties, Texas, and all Texas
counties lying south thereof.
El Paso, Hudspeth, Culberson, Reeves, February 15.......................... November 30.
Loving, Winkler, Ector, Upton, Reagan,
Sterling, Coke, Tom Green, Concho,
McCulloch, San Saba, Mills, Hamilton,
Bosque, Johnson, Tarrant, Wise, and Cooke
Counties, Texas, and all Texas Counties
lying south and east thereof to and
including Terrell, Crockett, Sutton,
Kimble, Gillespie, Blanco, Comal,
Guadalupe, Gonzales, De Witt, Lavaca,
Colorado, Wharton, and Matagorda
Counties, Texas.
Alabama; Arizona; Arkansas; California; February 28.......................... November 30.
Florida; Georgia; Louisiana; Mississippi;
Nevada; North Carolina; South Carolina.
All other Texas counties and all other March 15............................. November 30.
states.
----------------------------------------------------------------------------------------------------------------
[[Page 92]]
Sec. 407.12 Group risk plan for cotton.
The provisions of the Group Risk Plan for Cotton for the 2000 and
succeeding crop years are as follows:
1. Definitions
Harvest. Removal of the seed cotton from the stalk.
NASS yield. The yield calculated by dividing the NASS estimate of
upland cotton production in the county, by the NASS estimate of the
acres of upland cotton in the county, as specified in the actuarial
documents. The actuarial documents will specify whether harvested or
planted acreage is used to calculate the yield used to establish the
expected county yield and calculate indemnities.
Planted acreage. Land in which the cotton seed has been placed by a
machine appropriate for the insured crop and planting method, at the
correct depth, into a seedbed that has been properly prepared for the
planting method and production practice. Broadcast and subsequent
mechanical incorporation of the cotton seed is not allowed.
2. Crop Insured
The insured crop will be all upland cotton:
(a) Grown on insurable acreage in the county or counties listed in
the accepted application;
(b) Properly planted and reported by the acreage reporting date;
(c) Planted with the intent to be harvested; and
(d) That is not (unless allowed by the Special Provisions or by
written agreement):
(1) Colored cotton lint;
(2) Planted into an established grass or legume;
(3) Interplanted with another spring planted crop;
(4) Grown on acreage in which a hay crop was harvested in the same
calendar year unless the acreage is irrigated; or
(5) Grown on acreage on which a small grain crop reached the heading
stage in the same calendar year unless the acreage is irrigated or
adequate measures are taken to terminate the small grain crop prior to
heading and less than 50 percent of the small grain plants reach the
heading stage.
3. Payment.
(a) A payment will be made only if the payment yield for the insured
crop year is less than your trigger yield.
(b) Payment yields will be determined prior to July 16 following the
crop year.
(c) We will issue any payment to you prior to the August 16
immediately following our determination of the payment yield.
(d) The payment is equal to the payment calculation factor
multiplied by your policy protection for each insured crop practice and
type specified in the actuarial documents.
(e) The payment will not be recalculated even though the NASS yield
may be subsequently revised.
4. Program Dates
----------------------------------------------------------------------------------------------------------------
State and county Cancellation and termination dates Contract change date
----------------------------------------------------------------------------------------------------------------
Val Verde, Edwards, Kerr, Kendall, Bexar, January 15........................... November 30.
Wilson, Karnes, Goliad, Victoria, and
Jackson Counties, Texas, and all Texas
counties lying south thereof.
Alabama; Arizona; Arkansas; California; February 28.......................... November 30.
Florida; Georgia; Louisiana; Mississippi;
Nevada; North Carolina; South Carolina;
El Paso, Hudspeth, Culberson, Reeves,
Loving, Winkler, Ector, Upton, Reagan,
Sterling, Coke, Tom Green, Concho,
McCulloch, San Saba, Mills, Hamilton,
Bosque, Johnson, Tarrant, Wise, and Cooke
Counties, Texas, and all Texas counties
lying south and east thereof to and
including Terrell, Crockett, Sutton,
Kimble, Gillespie, Blanco, Comal,
Guadalupe, Gonzales, De Witt, Lavaca,
Colorado, Wharton, and Matagorda
Counties, Texas.
All other Texas counties and all other March 15............................. November 30.
States.
----------------------------------------------------------------------------------------------------------------
Sec. 407.13 Group risk plan for forage.
The provisions of the Group Risk Plan for Forage for the 2000 and
succeeding crop years are as follows:
1. Definitions
Harvest. Removal of the forage from the field, and rotational
grazing.
NASS yield. The yield calculated by dividing the NASS estimate of
the production of hay in the county by the NASS estimate of the acres of
hay in the county, as specified in the actuarial documents. The
actuarial documents will specify whether the harvested or planted
acreage is used to calculate the yield used to establish the expected
county yield and calculate indemnities.
Planted acreage. Land seeded to forage, by a planting method
appropriate for forage, into a properly prepared seedbed.
Rotational grazing. The defoliation of the insured forage by
livestock, within a pasturing system whereby the forage field is
subdivided into smaller parcels and livestock
[[Page 93]]
are moved from one area to another, allowing a period of grazing
followed by a period for forage regrowth.
2. Crop Insured
The insured crop will be the forage types shown on the Special
Provisions:
(a) Grown on insurable acreage in the county or counties listed in
the accepted application;
(b) Properly planted and reported by the acreage reporting date;
(c) Intended for harvest; and
(d) Not grown with another crop.
3. Insurable Acreage
In addition to section 3 of the Basic Provisions of the Group Risk
Plan Common Policy, acreage seeded to forage after July 1 of the
previous crop year will not be insurable. Acreage physically located in
another county not listed on the accepted application is not insured
under this policy.
4. Payment
(a) A payment will be made only if the payment yield for the insured
crop year is less than your trigger yield.
(b) Payment yields will be determined prior to May 1 following the
crop year.
(c) We will issue any payment to you prior to the May 31 immediately
following our determination of the payment yield.
(d) The payment is equal to the payment calculation factor
multiplied by your policy protection for each insured crop practice and
type specified in the actuarial documents.
(e) The payment will not be recalculated even though the NASS yield
may be subsequently revised.
5. Program Dates
November 30 is the Cancellation and Termination Date for all states.
The Contract Change Date is August 31 for all states.
6. Annual Premium
In lieu of section 8(g) of the Basic Provisions of the Group Risk
Plan Common Policy, the annual premium is earned and payable on the
acreage reporting date. You will be billed for premium due on the date
shown in the Special Provisions. The premium will be determined based on
the rate shown on the actuarial documents.
Sec. 407.14 Group risk plan for peanuts.
The provisions of the Group Risk Plan for Peanuts for the 2000 and
succeeding crop years are as follows:
1. Definitions
Harvest. Combining or threshing the peanuts.
NASS yield. The yield calculated by dividing the NASS estimate of
peanut production in the county, by the NASS estimate of the acres of
peanuts in the county, as specified in the actuarial documents. The
actuarial documents will specify whether the harvested or planted
acreage is used to calculate the yield used to establish the expected
county yield and calculate indemnities.
Planted acreage. Land in which the peanut seed has been placed by a
machine appropriate for the insured crop and planting method, at the
correct depth, into a seedbed that has been properly prepared for the
planting method and production practice.
2. Crop Insured
The insured crop will be all peanuts:
(a) Grown on insurable acreage in the county or counties listed in
the accepted application;
(b) Properly planted and reported by the acreage reporting date;
(c) Planted with the intent to be harvested as peanuts; and
(d) Not interplanted with an established grass or legume or
interplanted with another crop.
3. Payment
(a) A payment will be made only if the payment yield for the insured
crop year is less than your trigger yield.
(b) Payment yields will be determined prior to June 16 following the
crop year.
(c) We will issue any payment to you prior to the July 16
immediately following our determination of the payment yield.
(d) The payment is equal to the payment calculation factor
multiplied by your policy protection for each insured crop practice and
type specified in the actuarial documents.
(e) The payment will not be recalculated even though the NASS yield
may be subsequently revised.
4. Program Dates
----------------------------------------------------------------------------------------------------------------
State and county Cancellation and termination dates Contract change date
----------------------------------------------------------------------------------------------------------------
Jackson, Victoria, Goliad, Bee, Live Oak, January 15........................... November 30.
McMullen, La Salle, and Dimmit Counties,
Texas and all Texas Counties lying south
thereof.
El Paso, Hudspeth, Culberson, Reeves, February 28.......................... November 30.
Loving, Winkler, Ector, Upton, Reagan,
Sterling, Coke, Tom Green, Concho,
McCulloch, San Saba, Mills, Hamilton,
Bosque, Johnson, Tarrant, Wise, Cooke
Counties, Texas, and all Texas counties
south and east thereof; and all other
states except New Mexico, Oklahoma, and
Virginia.
[[Page 94]]
New Mexico; Oklahoma; Virginia; and all March 15............................. November 30.
other Texas Counties.
----------------------------------------------------------------------------------------------------------------
Sec. 407.15 Group risk plan for sorghum.
The provisions of the Group Risk Plan for Sorghum for the 2000 and
succeeding crop years are as follows:
1. Definitions
Harvest. Combining or threshing the sorghum for grain, or severing
the stalk from the land and chopping the stalk and head for the purpose
of livestock feed.
NASS yield. The yield calculated by dividing the NASS estimate of
sorghum for grain production in the county, by the NASS estimate of the
acres of sorghum for grain in the county, as specified in the actuarial
documents. The actuarial documents will specify whether the harvested or
planted acreage is used to calculate the yield used to establish the
expected county yield and calculate indemnities.
Planted acreage. Land in which the sorghum seed has been placed by a
machine appropriate for the insured crop and planting method, at the
correct depth, into a seedbed that has been properly prepared for the
planting method and production practice. Broadcast and subsequent
mechanical incorporation of the sorghum seed is not allowed.
2. Crop Insured
(a) The insured crop will be all sorghum:
(1) Grown on insurable acreage in the county or counties listed in
the accepted application;
(2) Properly planted and reported by the acreage reporting date;
(3) Planted with the intent to be harvested as grain or silage; and
(4) Not interplanted with an established grass or legume or
interplanted with another crop.
(b) Hybrid sorghum seed may only be insured if a written agreement
exists between you and us. Your request to insure such crop must be in
writing and submitted to your agent not later than the sales closing
date.
3. Payment
(a) A payment will be made only if the payment yield for the insured
crop year is less than your trigger yield.
(b) Payment yields will be determined prior to April 16 following
the crop year.
(c) We will issue any payment to you prior to the May 16 immediately
following our determination of the payment yield.
(d) The payment is equal to the payment calculation factor
multiplied by your policy protection for each insured crop practice and
type specified in the actuarial documents.
(e) The payment will not be recalculated even though the NASS yield
may be subsequently revised.
4. Program Dates
----------------------------------------------------------------------------------------------------------------
State and county Cancellation and termination dates Contract change date
----------------------------------------------------------------------------------------------------------------
Val Verde, Edwards, Kerr, Kendall, Bexar, January 15........................... November 30.
Wilson, Karnes, Goliad, Victoria, and
Jackson Counties, Texas, and all Texas
counties lying south thereof.
El Paso, Hudspeth, Culberson, Reeves, February 15.......................... November 30.
Loving, Winkler, Ector, Upton, Reagan,
Sterling, Coke, Tom Green, Concho,
McCulloch, San Saba, Mills, Hamilton,
Bosque, Johnson, Tarrant, Wise, and Cooke
Counties, Texas, and all Texas counties
south and east thereof to and including
Terrell, Crockett, Sutton, Kimble,
Gillespie, Blanco, Comal, Guadalupe,
Gonzales, De Witt, Lavaca, Colorado,
Wharton, and Matagorda Counties, Texas.
Alabama; Arizona; Arkansas; California; February 28.......................... November 30.
Florida; Georgia; Louisiana; Mississippi;
Nevada; North Carolina; and South
Carolina.
All other Texas counties and all other March 15............................. November 30.
states.
----------------------------------------------------------------------------------------------------------------
Sec. 407.16 Group risk plan for soybean.
The provisions of the Group Risk Plan for Soybeans for the 2000 and
succeeding crop years are as follows:
1. Definitions
Harvest. Combining or threshing the soybeans.
NASS yield. The yield calculated by dividing the NASS estimate of
soybean production in the county, by the NASS estimate of the acres of
soybeans in the county, as specified in the actuarial documents. The
actuarial documents will specify whether the
[[Page 95]]
harvested or planted acreage is used to calculate the yield used to
establish the expected county yield and calculate indemnities.
Planted acreage. Land in which the soybean seed has been placed by a
machine appropriate for the insured crop and planting method, at the
correct depth, into a seedbed that has been properly prepared for the
planting method and production practice. Land on which seed is initially
spread onto the soil surface by any method and which subsequently is
mechanically incorporated into the soil in a timely manner and at the
proper depth, will also be considered planted.
2. Crop Insured
The insured crop will be all soybeans:
(a) Grown on insurable acreage in the county or counties listed in
the accepted application;
(b) Properly planted and reported by the acreage reporting date;
(c) Planted with the intent to be harvested as soybeans; and
(d) Not planted into an established grass or legume or interplanted
with another crop.
3. Payment
(a) A payment will be made only if the payment yield for the insured
crop year is less than your trigger yield.
(b) Payment yields will be determined prior to April 16 following
the crop year.
(c) We will issue any payment to you prior to the May 16 immediately
following our determination of the payment yield.
(d) The payment is equal to the payment calculation factor
multiplied by your policy protection for each insured crop practice and
type specified on the actuarial documents.
(e) The payment will not be recalculated even though the NASS yield
may be subsequently revised.
4. Program Dates
----------------------------------------------------------------------------------------------------------------
State and county Cancellation and termination dates Contract change date
----------------------------------------------------------------------------------------------------------------
Jackson, Victoria, Goliad, Bee, Live Oak, February 15.......................... November 30.
McMullen, La Salle, and Dimmit Counties,
Texas and all Texas counties lying south
thereof.
Alabama; Arizona; Arkansas; California; February 28.......................... November 30.
Florida; Georgia; Louisiana; Mississippi;
Nevada; North Carolina; South Carolina;
and El Paso, Hudspeth, Culberson, Reeves,
Loving, Winkler, Ector, Upton, Reagan,
Sterling, Coke, Tom Green, Concho,
McCulloch, San Saba, Mills, Hamilton,
Bosque, Johnson, Tarrant, Wise, and Cooke
Counties, Texas, and all Texas counties
lying south and east thereof to and
including Maverick, Zavala, Frio,
Atascosa, Karnes, De Witt, Lavaca,
Colorado, Wharton, and Matagorda
Counties, Texas.
All other Texas counties and all other March 15............................. November.
States.
All other Texas counties and all other March 15............................. November 30.
states..
----------------------------------------------------------------------------------------------------------------
Sec. 407.17 Group risk plan for wheat.
The provisions of the Group Risk Plan for Wheat for the 2000 and
succeeding crop years are as follows:
1. Definitions
Harvest. Combining or threshing the wheat for grain.
NASS yield. The yield calculated by dividing the NASS estimate of
the wheat production in the county, by the NASS estimate of the acres of
wheat in the county, as specified in the actuarial documents. The
actuarial documents will specify whether the harvested or planted
acreage is used to calculate the yield used to establish the expected
county yield and calculate indemnities.
Planted acreage. Land in which the wheat seed has been planted by a
machine appropriate for the insured crop and planting method, at the
correct depth, into a seedbed that has been properly prepared for the
planting method and production practice. Land on which seed is initially
spread onto the soil surface by any method and which subsequently is
mechanically incorporated into the soil in a timely manner and at the
proper depth, will also be considered planted.
2. Crop Insured
The insured crop will be all wheat:
(a) Grown on insurable acreage in the county or counties listed in
the accepted application;
(b) Properly planted and reported by the acreage reporting date;
(c) Planted with the intent to be harvested as grain; and
(d) Not planted into an established grass or legume, interplanted
with another crop, or planted as a nurse crop, unless seeded at the
normal rate and intended for harvest as grain.
3. Payment
(a) A payment will be made only if the payment yield for the insured
crop year is less than your trigger yield.
(b) Payment yields will be determined prior to April 1 following the
crop year.
[[Page 96]]
(c) We will issue any payment to you prior to the May 1 immediately
following our determination of the payment yield.
(d) The payment is equal to the payment calculation factor
multiplied by your policy protection for each insured crop practice and
type specified in the actuarial documents.
(e) The payment will not be recalculated even though the NASS yield
may be subsequently revised.
----------------------------------------------------------------------------------------------------------------
State and county Cancellation and termination dates Contract change date
----------------------------------------------------------------------------------------------------------------
All Colorado counties except Alamosa, September 30......................... June 30.
Conejos, Costilla, Rio Grande, and
Saguache; all Montana counties except
Daniels and Sheridan Counties; all South
Dakota counties except Corson, Walworth,
Edmonds, Faulk, Spink, Beadle, Kingsbury,
Miner, McCook, Turner, and Yankton
Counties and all South Dakota counties
east thereof; all Wyoming counties except
Big Horn, Fremont, Hot Springs, Park, and
Washakie Counties; and all other states
except Alaska, Arizona, California,
Maine, Minnesota, Nevada, New Hampshire,
North Dakota, Utah, and Vermont..
Arizona; California; Nevada; and Utah..... October 31........................... June 30.
Alaska; Alamosa, Conejos, Costilla, Rio March 15............................. November 30.
Grande, and Saguache Counties, Colorado;
Maine; Minnesota; Daniels and Sheridan
Counties, Montana; New Hampshire; North
Dakota; Corson, Walworth, Edmunds, Faulk,
Spink, Beadle, Kingsbury, Miner, McCook,
Turner, and Yankton Counties South
Dakota, and all South Dakota counties
east thereof; Vermont; and Big Horn,
Fremont, Hot Springs, Park, and Washakie
Counties, Wyoming..
----------------------------------------------------------------------------------------------------------------
PARTS 408-411 [RESERVED]
PART 412_PUBLIC INFORMATION_FREEDOM OF INFORMATION--Table of Contents
Sec.
412.1 General statement.
412.2 Public inspection and copying.
412.3 Index.
412.4 Requests for records.
412.5 Appeals.
412.6 Timing of responses to requests.
Authority: 5 U.S.C. 552 and 7 U.S.C. 1506.
Source: 62 FR 67694, Dec. 30, 1997, unless otherwise noted.
Sec. 412.1 General statement.
This part is issued in accordance with the regulations of the
Secretary of Agriculture published at 7 CFR 1.1-1.23, and appendix A,
implementing the Freedom of Information Act (5 U.S.C. 552). The
Secretary's regulations, as implemented by this part, and the Risk
Management Agency (RMA) govern availability of records of the Federal
Crop Insurance Corporation (FCIC) as administration of the crop
insurance program for FCIC.
Sec. 412.2 Public inspection and copying.
(a) Members of the public may request access to the information
specified in Sec. 412.2(d) for inspection and copying.
(b) To obtain access to specified information, the public should
submit a written request, in accordance with 7 CFR 1.6, to the Appeals,
Litigation and Legal Liaison Staff, Risk Management Agency, United
States Department of Agriculture, 1400 Independence Avenue, SW, STOP
0807, room 6618-S, Washington, DC 20250-0807, from 9:00 a.m.-4:00 pm.,
EDT Monday through Friday, except holidays.
(c) When the information requested is not located at the office of
the Appeals, Litigation and Legal Liaison Staff, the Appeals, Litigation
and Legal Liaison Staff will direct the request to the appropriate
office where the information can be obtained. The requester will be
informed that the request has been forwarded to the appropriate office.
(d) FCIC will make available for inspection and copying, unless
otherwise exempt from publication under sections 552(a)(2)(C) and
552(b):
(1) Final opinions, including concurring and dissenting opinions and
orders made in the adjudication of cases; and
(2) Those statements of policy and interpretations that have been
adopted by FCIC and RMA and are not published in the Federal Register;
and
(3) Administrative staff manuals and instructions to staff that
affect a member of the public.
Sec. 412.3 Index.
5 U.S.C. 552(a)(2) requires that each agency publish, or otherwise
make
[[Page 97]]
available, a current index of all materials available for public
inspection and copying. RMA and FCIC will maintain a current index
providing identifying information for the public as to any material
issued, adopted, or promulgated by the Agency since July 4, 1967, and
required by section 552(a)(2). Pursuant to the Freedom of Information
Act provisions, RMA and FCIC have determined that in view of the small
number of public requests for such index, publication of such an index
would be unnecessary and impracticable. Copies of the index will be
available upon request in person or by mail at the address stated in
Sec. 412.2(b).
Sec. 412.4 Requests for records.
The Director of the Appeals, Litigation and Legal Liaison staff, RMA
located at the above stated address, is the person authorized to receive
Freedom of Information Act and to determine whether to grant or deny
such requests in accordance with 7 CFR 1.8.
Sec. 412.5 Appeals.
Any person whose request under Sec. 412.4 is denied shall have the
right to appeal such denial. This appeal shall be submitted in
accordance with 7 CFR 1.13 and addressed to the Manager, Federal Crop
Insurance Corporation, United States Department of Agriculture, 1400
Independence Avenue, SW., STOP 0807, room 6618-S, Washington, DC 20250-
0807.
Sec. 412.6 Timing of responses to requests.
(a) In general, FCIC will respond to requests according to their
order of receipt.
(b) Existing responsive documents or information may be maintained
in RMA's field offices. Therefore, extra time may be necessary to search
and collect the documents.
PARTS 413-456 [RESERVED]
PART 457_COMMON CROP INSURANCE REGULATIONS--Table of Contents
Sec.
457.1 Applicability.
457.2 Availability of Federal crop insurance.
457.3 Premium rates, production guarantees or amounts of insurance,
coverage levels, and prices at which indemnities shall be
computed.
457.4 OMB control numbers.
457.5 Creditors.
457.6 [Reserved]
457.7 The contract.
457.8 The application and policy.
457.9 Appropriation contingency.
457.10-457.100 [Reserved]
457.101 Small grains crop insurance.
457.102 Wheat or barley winter coverage endorsement.
457.103 [Reserved]
457.104 Cotton crop insurance provisions.
457.105 Extra long staple cotton crop insurance provisions.
457.106 Texas citrus tree crop insurance provisions.
457.107 Florida citrus fruit crop insurance provisions.
457.108 Sunflower seed crop insurance provisions.
457.109 Sugar beet crop insurance provisions.
457.110 Fig crop insurance provisions.
457.111 Pear crop insurance provisions.
457.112 Hybrid sorghum seed crop insurance provisions.
457.113 Coarse grains crop insurance provisions.
457.114-457.115 [Reserved]
457.115 Nursery frost, freeze, and cold damage exclusion option.
457.116 Sugarcane crop insurance provisions.
457.117 Forage production crop insurance provisions.
457.118 Malting barley crop insurance.
457.119 Texas citrus fruit crop insurance provisions.
457.120 [Reserved]
457.121 Arizona-California citrus crop insurance provisions.
457.122 Walnut crop insurance provisions.
457.123 Almond crop insurance provisions.
457.124 Raisin crop insurance provisions.
457.125 Safflower crop insurance provisions.
457.126 Popcorn crop insurance provisions.
457.127 [Reserved]
457.128 Guaranteed production plan of fresh market tomato crop insurance
provisions.
457.129 Fresh market sweet corn crop insurance provisions.
457.130 Madacamia tree crop insurance provisions.
457.131 Macadamia nut crop insurance provisions.
457.132 Cranberry crop insurance provisions.
457.133 Prune crop insurance provisions.
457.134 Peanut crop insurance provisions.
457.135 Onion crop insurance provisions.
457.136 Guaranteed tobacco crop insurance provisions.
457.137 Green pea crop insurance provisions.
[[Page 98]]
457.138 Grape crop insurance provisions.
457.139 Fresh market tomato (dollar plan) crop insurance provisions.
457.140 Dry pea crop insurance provisions.
457.141 Rice crop insurance provisions.
457.142 Northern potato crop insurance provisions.
457.143 Northern potato crop insurance--quality endorsement.
457.144 Northern potato crop insurance--processing quality endorsement.
457.145 Potato crop insurance --certified seed endorsement.
457.146 Northern potato crop insurance--storage coverage endorsement.
457.147 Central and Southern potato crop insurance provisions.
457.148 Fresh market pepper crop insurance provisions.
457.149 Table grape crop insurance provisions.
457.150 Dry bean crop insurance provisions.
457.151 Forage seeding crop insurance provisions.
457.152 Hybrid seed corn crop insurance provisions.
457.153 Peach crop insurance provisions.
457.154 Processing sweet corn crop insurance provisions.
457.155 Processing bean crop insurance provisions.
457.156 Quota tobacco crop insurance provisions.
457.157 Plum crop insurance provisions.
457.158 Apple crop insurance provisions.
457.159 Stonefruit crop insurance provisions.
457.160 Processing tomato crop insurance provisions.
457.161 Canola and rapeseed crop insurance provisions.
457.162 Nursery crop insurance provisions.
457.163 Nursery peak inventory endorsement.
457.165 Millet crop insurance provisions.
457.166 Blueberry crop insurance provisions.
457.167 Pecan revenue crop insurance provisions.
Authority: 7 U.S.C. 1506(l), 1506(p).
Source: 56 FR 1351, Jan. 14, 1991, unless otherwise noted.
Sec. 457.1 Applicability.
The provisions of this part are applicable only to crops for which a
crop provision is published as a section to 7 CFR part 457 and then only
for the crops and crop year designated by the application section.
Sec. 457.2 Availability of Federal crop insurance.
(a) Insurance shall be offered under the provisions of this section
on the insured crop in counties within the limits prescribed by and in
accordance with the provisions of the Federal Crop Insurance Act, as
amended (the Act). The crops and counties shall be designated by the
Manager of the Corporation from those approved by the Board of Directors
of the Corporation.
(b) The insurance is offered through companies reinsured by the
Federal Crop Insurance Corporation (FCIC) that offer contracts
containing the same terms and conditions as the contract set out in this
part. These contracts are clearly identified as being reinsured by FCIC.
FCIC may offer the contract for the catastrophic level of coverage
contained in this part and part 402 directly to the insured through
local offices of the Department of Agriculture only if the Secretary
determines that the availability of local agents is not adequate. Those
contracts are specifically identified as being offered by FCIC.
(c) Except as specified in the Crop Provisions, the Catastrophic
Risk Protection Endorsement (part 402 of this chapter) and part 400,
subpart T of this chapter, no person may have in force more than one
contract on the same crop for the same crop year in the same county.
(d) Except as specified in paragraph (c) of this section, if a
person has more than one contract authorized under the Act that provides
coverage for the same loss on the same crop for the same crop year in
the same county, all such contracts shall be voided for that crop year
and the person will be liable for the premium on all contracts, unless
the person can show to the satisfaction of the Corporation that the
multiple contracts of insurance were without the fault of the person.
(1) If the multiple contracts of insurance are shown to be without
the fault of the person and:
(i) One contract is an additional coverage policy and the other
contract is a Catastrophic Risk Protection policy, the additional
coverage policy will apply if both policies are with the same insurance
provider, or if not, both insurance providers agree, and the
Catastrophic Risk Protection policy will be canceled (If the insurance
providers do not agree, the policy with the earliest
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date of application will be in force and the other contract will be
canceled); or
(ii) Both contracts are additional coverage policies or both are
Catastrophic Risk Protection policies, the contract with the earliest
signature date on the application will be valid and the other contract
on that crop in the county for that crop year will be canceled, unless
both policies are with the same insurance provider and the insurance
provider agrees otherwise or both policies are with different insurance
providers and both insurance providers agree otherwise.
(2) No liability for any indemnity, prevented planting payment,
replanting payment or premium will attach to the contracts canceled as
specified in paragraphs (d)(1)(i) and (ii) of this section.
(e) The person must repay all amounts received in violation of this
section with interest at the rate contained in the contract (see Sec.
457.8, paragraph 24).
(f) An insured whose contract with the Corporation or with a company
reinsured by the Corporation under the Act has been terminated because
of violation of the terms of the contract is not eligible to obtain
multiple peril crop insurance under the Act with the Corporation or with
a company reinsured by the Corporation unless the insured can show that
the default in the prior contract was cured prior to the sales closing
date of the contract applied for or unless the insured can show that the
termination was improper and should not result in subsequent
ineligibility.
(g) All applicants for insurance under the Act must advise the
agent, in writing, at the time of application, of any previous
applications for insurance or policies of insurance under the Act and
the present status of any such applications or insurance.
[56 FR 1351, Jan. 14, 1991, as amended at 58 FR 58262, Nov. 1, 1993; 62
FR 65154, Dec. 10, 1997; 63 FR 66712, Dec. 3, 1998; 69 FR 48738, Aug.
10, 2004]
Sec. 457.3 Premium rates, production guarantees or amounts of insurance,
coverage levels, and prices at which indemnities shall be computed.
(a) The Manager shall establish premium rates, production guarantees
or amounts of insurance, coverage levels, and prices at which
indemnities shall be computed for the insured crop which will be
included in the actuarial table on file in the applicable agents' office
for the county and which may be changed from year to year.
(b) At the time the application for insurance is made, the applicant
will elect an amount of insurance or a coverage level and price from
among those contained in the actuarial table for the crop year.
Sec. 457.4 OMB control numbers.
The information collection requirements contained in these
regulations have been approved by the Office of Management and Budget
(OMB) under the provisions of 44 U.S.C. chapter 35 and have been
assigned OMB number 0563-0053.
[62 FR 65154, Dec. 10, 1997]
Sec. 457.5 Creditors.
An interest of a person in an insured crop existing by virtue of a
lien, mortgage, garnishment, levy, execution, bankruptcy, involuntary
transfer or other similar interest shall not entitle the holder of the
interest to any benefit under the contract.
Sec. 457.6 [Reserved]
Sec. 457.7 The contract.
The insurance contract shall become effective upon the acceptance by
the Corporation or the reinsured company of a duly executed application
for insurance on a form prescribed by the Corporation. Changes made in
the contract shall not affect its continuity from year to year. No
indemnity shall be paid unless the insured complies with all terms and
conditions of the
[[Page 100]]
contract, except as provided in the policy. The forms referred to in the
contract are available at the offices of the crop insurance agent.
[56 FR 1351, Jan. 14, 1991, as amended at 69 FR 48739, Aug. 10, 2004]
Sec. 457.8 The application and policy.
(a) Application for insurance on a form prescribed by the
Corporation, or approved by the Corporation, must be made by any person
who wishes to participate in the program, to cover such person's share
in the insured crop as landlord, owner-operator, crop ownership
interest, or tenant. No other person's interest in the crop may be
insured under an application unless that person's interest is clearly
shown on the application and unless that other person's interest is
insured in accordance with the procedures of the Corporation. The
application must be submitted to the Corporation or the reinsured
company through the crop insurance agent and must be submitted on or
before the applicable sales closing date on file.
(b) FCIC or the reinsured company may reject or discontinue the
acceptance of applications in any country or of any individual
application upon FCIC's determination that the insurance risk is
excessive.
Department of Agriculture
Federal Crop Insurance Corporation
[or policy issuing company name]
Common Crop Insurance Policy
(This is a continuous policy. Refer to section 2.)
FCIC Policies
This is an insurance policy issued by the Federal Crop Insurance
Corporation (FCIC), a United States government agency. The provisions of
the policy may not be waived or modified in any way by us, your
insurance agent or any employee of USDA unless the policy specifically
authorizes a waiver or modification by written agreement. Procedures
(handbooks, manuals, memoranda, and bulletins), issued by us and
published on the RMA Web site at http://www.rma.usda.gov/ or a successor
Web site will be used in the administration of this policy, including
the adjustment of any loss or claim submitted hereunder.
Throughout this policy, ``you'' and ``your'' refer to the named
insured shown on the accepted application and ``we,'' ``us,'' and
``our'' refer to the Federal Crop Insurance Corporation. Unless the
context indicates otherwise, use of the plural form of a word includes
the singular and use of the singular form of the word includes the
plural.
AGREEMENT TO INSURE: In return for the payment of the premium, and
subject to all of the provisions of this policy, we agree with you to
provide the insurance as stated in this policy. If there is a conflict
between the Act, the regulations published at 7 CFR chapter IV, and the
procedures issued by us, the order of priority is as follows: (1) The
Act; (2) the regulations; and (3) the procedures issued by us, with (1)
controlling (2), etc. If there is a conflict between the policy
provisions published at 7 CFR part 457 and the administrative
regulations published at 7 CFR part 400, the policy provisions published
at 7 CFR part 457 control. If a conflict exists among the policy
provisions, the order of priority is: (1) The Catastrophic Risk
Protection Endorsement, as applicable; (2) the Special Provisions; (3)
the Crop Provisions; and (4) these Basic Provisions, with (1)
controlling (2), etc.
Reinsured Policies
This insurance policy is reinsured by the Federal Crop Insurance
Corporation (FCIC) under the provisions of the Federal Crop Insurance
Act (Act) (7 U.S.C. 1501 et seq.). All provisions of the policy and
rights and responsibilities of the parties are specifically subject to
the Act. The provisions of the policy may not be waived or varied in any
way by us, our insurance agent or any other contractor or employee of
ours or any employee of USDA unless the policy specifically authorizes a
waiver or modification by written agreement. We will use the procedures
(handbooks, manuals, memoranda and bulletins), as issued by FCIC and
published on the RMA Web site at http://www.rma.usda.gov/ or a successor
Web site, in the administration of this policy, including the adjustment
of any loss or claim submitted hereunder. In the event that we cannot
pay your loss because we are insolvent or are otherwise unable to
perform our duties under our reinsurance agreement with FCIC, your claim
will be settled in accordance with the provisions of this policy and
FCIC will be responsible for any amounts owed. No state guarantee fund
will be liable for your loss.
Throughout this policy, ``you'' and ``your'' refer to the named
insured shown on the accepted application and ``we,'' ``us,'' and
``our'' refer to the insurance company providing insurance. Unless the
context indicates otherwise, use of the plural form of a word includes
the singular and use of the singular form of the word includes the
plural.
[[Page 101]]
AGREEMENT TO INSURE: In return for the payment of the premium, and
subject to all of the provisions of this policy, we agree with you to
provide the insurance as stated in this policy. If there is a conflict
between the Act, the regulations published at 7 CFR chapter IV, and the
procedures as issued by FCIC, the order of priority is as follows: (1)
The Act; (2) the regulations; and (3) the procedures as issued by FCIC,
with (1) controlling (2), etc. If there is a conflict between the policy
provisions published at 7 CFR part 457 and the administrative
regulations published at 7 CFR part 400, the policy provisions published
at 7 CFR part 457 control. If a conflict exists among the policy
provisions, the order of priority is: (1) The Catastrophic Risk
Protection Endorsement, as applicable; (2) the Special Provisions; (3)
the Crop Provisions; and (4) these Basic Provisions, with (1)
controlling (2), etc.
Terms and Conditions
Basic Provisions
1. Definitions
Abandon. Failure to continue to care for the crop, providing care so
insignificant as to provide no benefit to the crop, or failure to
harvest in a timely manner, unless an insured cause of loss prevents you
from properly caring for or harvesting the crop or causes damage to it
to the extent that most producers of the crop on acreage with similar
characteristics in the area would not normally further care for or
harvest it.
Acreage report. A report required by section 6 of these Basic
Provisions that contains, in addition to other required information,
your report of your share of all acreage of an insured crop in the
county, whether insurable or not insurable.
Acreage reporting date. The date contained in the Special Provisions
or as provided in section 6 by which you are required to submit your
acreage report.
Act. The Federal Crop Insurance Act (7 U.S.C. 1501 et seq.).
Actual Production History (APH). A process used to determine
production guarantees in accordance with 7 CFR part 400, subpart (G).
Actual yield. The yield per acre for a crop year calculated from the
production records or claims for indemnities. The actual yield is
determined by dividing total production (which includes harvested and
appraised production) by planted acres.
Actuarial documents. The material for the crop year which is
available for public inspection in your agent's office and published on
RMA's Web site at http://www.rma.usda.gov/ or a successor Web site, and
which shows available coverage levels, information needed to determine
amounts of insurance, premium rates, premium adjustment percentages,
practices, particular types or varieties of the insurable crop,
insurable acreage, and other related information regarding crop
insurance in the county.
Additional coverage. A level of coverage greater than catastrophic
risk protection.
Administrative fee. An amount you must pay for catastrophic risk
protection, and additional coverage for each crop year as specified in
section 7 and the Catastrophic Risk Protection Endorsement.
Agricultural commodity. Any crop or other commodity produced,
regardless of whether or not it is insurable.
Agricultural experts. Persons who are employed by the Cooperative
State Research, Education and Extension Service or the agricultural
departments of universities, or other persons approved by FCIC, whose
research or occupation is related to the specific crop or practice for
which such expertise is sought.
Annual crop. An agricultural commodity that normally must be planted
each year.
Application. The form required to be completed by you and accepted
by us before insurance coverage will commence. This form must be
completed and filed in your agent's office not later than the sales
closing date of the initial insurance year for each crop for which
insurance coverage is requested. If cancellation or termination of
insurance coverage occurs for any reason, including but not limited to
indebtedness, suspension, debarment, disqualification, cancellation by
you or us or violation of the controlled substance provisions of the
Food Security Act of 1985, a new application must be filed for the crop.
Insurance coverage will not be provided if you are ineligible under the
contract or under any Federal statute or regulation.
Approved yield. The actual production history (APH) yield determined
in accordance with 7 CFR part 400, subpart G, including any adjustments
elected under section 36.
Approved yield. The actual production history (APH) yield,
calculated and approved by the verifier, used to determine the
production guarantee by summing the yearly actual, assigned, adjusted or
unadjusted transitional yields and dividing the sum by the number of
yields contained in the database, which will always contain at least
four yields. The database may contain up to 10 consecutive crop years of
actual or assigned yields. The approved yield may have yield adjustments
elected under section 36, revisions according to section 3, or other
limitations according to FCIC approved procedures applied when
calculating the approved yield.
Area. Land surrounding the insured acreage with geographic
characteristics, topography, soil types and climatic conditions similar
to the insured acreage.
Assignment of indemnity. A transfer of policy rights, made on our
form, and effective when approved by us. It is the arrangement
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whereby you assign your right to an indemnity payment to any party of
your choice for the crop year.
Average yield. The yield, calculated by summing the yearly actual,
assigned, adjusted or unadjusted transitional yields and dividing the
sum by the number of yields contained in the database, prior to any
adjustments, including those elected under section 36, revisions
according to section 3, or other limitations according to FCIC approved
procedures.
Basic unit. All insurable acreage of the insured crop in the county
on the date coverage begins for the crop year:
(1) In which you have 100 percent crop share; or
(2) Which is owned by one person and operated by another person on a
share basis. (Example: If, in addition to the land you own, you rent
land from five landlords, three on a crop share basis and two on a cash
basis, you would be entitled to four units; one for each crop share
lease and one that combines the two cash leases and the land you own.)
Land which would otherwise be one unit may, in certain instances, be
divided according to guidelines contained in section 34 of these Basic
Provisions and in the applicable Crop Provisions.
Buffer zone. A parcel of land, as designated in your organic plan,
that separates agricultural commodities grown under organic practices
from agricultural commodities grown under non-organic practices, and
used to minimize the possibility of unintended contact by prohibited
substances or organisms.
Cancellation date. The calendar date specified in the Crop
Provisions on which coverage for the crop will automatically renew
unless canceled in writing by either you or us or terminated in
accordance with the policy terms.
Catastrophic risk protection. The minimum level of coverage offered
by FCIC that is required before you may qualify for certain other USDA
program benefits unless you execute a waiver of any eligibility for
emergency crop loss assistance in connection with the crop.
Catastrophic Risk Protection Endorsement. The part of the crop
insurance policy that contains provisions of insurance that are specific
to catastrophic risk protection.
Certified organic acreage. Acreage in the certified organic farming
operation that has been certified by a certifying agent as conforming to
organic standards in accordance with 7 CFR part 205.
Certifying agent. A private or governmental entity accredited by the
USDA Secretary of Agriculture for the purpose of certifying a
production, processing or handling operation as organic.
Claim for indemnity. A claim made on our form by you for damage or
loss to an insured crop and submitted to us not later than 60 days after
the end of the insurance period (see section 14).
Consent. Approval in writing by us allowing you to take a specific
action.
Code of Federal Regulations (CFR). The codification of general and
permanent rules published in the Federal Register by the Executive
departments and agencies of the Federal Government. Rules published in
the Federal Register by FCIC are contained in 7 CFR chapter IV. The full
text of the CFR is available in electronic format at http://
www.access.gpo.gov/ or a successor Web site.
Contract. (See ``policy'').
Contract change date. The calendar date by which changes to the
policy, if any, will be made available in accordance with section 4 of
these Basic Provisions.
Conventional farming practice. A system or process for producing an
agricultural commodity, excluding organic farming practices, that is
necessary to produce the crop that may be, but is not required to be,
generally recognized by agricultural experts for the area to conserve or
enhance natural resources and the environment.
County. Any county, parish, or other political subdivision of a
state shown on your accepted application, including acreage in a field
that extends into an adjoining county if the county boundary is not
readily discernible.
Coverage. The insurance provided by this policy, against insured
loss of production or value, by unit as shown on your summary of
coverage.
Coverage begins, date. The calendar date insurance begins on the
insured crop, as contained in the Crop Provisions, or the date planting
begins on the unit (see section 11 of these Basic Provisions for
specific provisions relating to prevented planting).
Cover crop. A crop generally recognized by agricultural experts as
agronomically sound for the area for erosion control or other purposes
related to conservation or soil improvement. A cover crop may be
considered to be a second crop (see the definition of ``second crop'').
Crop Provisions. The part of the policy that contains the specific
provisions of insurance for each insured crop.
Crop year. The period within which the insured crop is normally
grown, regardless of whether or not it is actually grown, and designated
by the calendar year in which the insured crop is normally harvested,
unless otherwise specified in the Crop Provisions.
Damage. Injury, deterioration, or loss of production of the insured
crop due to insured or uninsured causes.
Days. Calendar days.
Deductible. The amount determined by subtracting the coverage level
percentage you choose from 100 percent. For example, if you
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elected a 65 percent coverage level, your deductible would be 35 percent
(100% - 65% = 35%).
Delinquent debt. Any administrative fees or premiums for insurance
issued under the authority of the Act, and the interest on those
amounts, if applicable, that are not postmarked or received by us or our
agent on or before the termination date unless you have entered into an
agreement acceptable to us to pay such amounts or have filed for
bankruptcy on or before the termination date; any other amounts due us
for insurance issued under the authority of the Act (including, but not
limited to, indemnities, prevented planting payments or replanting
payments found not to have been earned or that were overpaid), and the
interest on such amounts, if applicable, which are not postmarked or
received by us or our agent by the due date specified in the notice to
you of the amount due; or any amounts due under an agreement with you to
pay the debt, which are not postmarked or received by us or our agent by
the due dates specified in such agreement.
Disinterested third party. A person that does not have any familial
relationship (parents, brothers, sisters, children, spouse,
grandchildren, aunts, uncles, nieces, nephews, first cousins, or
grandparents, related by blood, adoption or marriage, are considered to
have a familial relationship) with you or who will not benefit
financially from the sale of the insured crop. Persons who are
authorized to conduct quality analysis in accordance with the Crop
Provisions are considered disinterested third parties unless there is a
familial relationship.
Double crop. Producing two or more crops for harvest on the same
acreage in the same crop year.
Earliest planting date. The initial planting date contained in the
Special Provisions, which is the earliest date you may plant an insured
agricultural commodity and qualify for a replanting payment if such
payments are authorized by the Crop Provisions.
End of insurance period, date of. The date upon which your crop
insurance coverage ceases for the crop year (see Crop Provisions and
section 11).
Enterprise unit. All insurable acreage of the insured crop in the
county in which you have a share on the date coverage begins for the
crop year. To qualify, an enterprise unit must contain all of the
insurable acreage of the same insured crop in:
(1) One or more basic units that are located in two or more separate
sections, section equivalents, FSA farm serial numbers, or units
established by written agreement, with at least some planted acreage in
two or more separate sections, section equivalents, FSA farm serial
numbers, or two or more separate units as established by written
agreement; or
(2) Two or more optional units established by separate sections,
section equivalents, FSA farm serial numbers, or as established by
written agreement, with at least two optional units containing some
planted acreage.
Field. All acreage of tillable land within a natural or artificial
boundary (e.g., roads, waterways, fences, etc.). Different planting
patterns or planting different crops do not create separate fields.
Final planting date. The date contained in the Special Provisions
for the insured crop by which the crop must initially be planted in
order to be insured for the full production guarantee or amount of
insurance per acre.
First insured crop. With respect to a single crop year and any
specific crop acreage, the first instance that an agricultural commodity
is planted for harvest or prevented from being planted and is insured
under the authority of the Act. For example, if winter wheat that is not
insured is planted on acreage that is later planted to soybeans that are
insured, the first insured crop would be soybeans. If the winter wheat
was insured, it would be the first insured crop.
FSA. The Farm Service Agency, an agency of the USDA, or a successor
agency.
FSA farm serial number. The number assigned to the farm by the local
FSA office.
Generally recognized. When agricultural experts or the organic
agricultural industry, as applicable, are aware of the production method
or practice and there is no genuine dispute regarding whether the
production method or practice allows the crop to make normal progress
toward maturity and produce at least the yield used to determine the
production guarantee or amount of insurance.
Good farming practices. The production methods utilized to produce
the insured crop and allow it to make normal progress toward maturity
and produce at least the yield used to determine the production
guarantee or amount of insurance, including any adjustments for late
planted acreage, which are: (1) For conventional or sustainable farming
practices, those generally recognized by agricultural experts for the
area; or (2) for organic farming practices, those generally recognized
by the organic agricultural industry for the area or contained in the
organic plan. We may, or you may request us to, contact FCIC to
determine whether or not production methods will be considered to be
``good farming practices.''
Household. A domestic establishment including the members of a
family (parents, brothers, sisters, children, spouse, grandchildren,
aunts, uncles, nieces, nephews, first cousins, or grandparents, related
by blood, adoption or marriage, are considered to be family members) and
others who live under the same roof.
[[Page 104]]
Insurable loss. Damage for which coverage is provided under the
terms of your policy, and for which you accept an indemnity payment.
Insured. The named person as shown on the application accepted by
us. This term does not extend to any other person having a share or
interest in the crop (for example, a partnership, landlord, or any other
person) unless specifically indicated on the accepted application.
Insured crop. The crop in the county for which coverage is available
under your policy as shown on the application accepted by us.
Interplanted. Acreage on which two or more crops are planted in a
manner that does not permit separate agronomic maintenance or harvest of
the insured crop.
Irrigated practice. A method of producing a crop by which water is
artificially applied during the growing season by appropriate systems
and at the proper times, with the intention of providing the quantity of
water needed to produce at least the yield used to establish the
irrigated production guarantee or amount of insurance on the irrigated
acreage planted to the insured crop.
Late planted. Acreage initially planted to the insured crop after
the final planting date.
Late planting period. The period that begins the day after the final
planting date for the insured crop and ends 25 days after the final
planting date, unless otherwise specified in the Crop Provisions or
Special Provisions.
Liability. The dollar amount of insurance coverage used in the
premium computation for the insured agricultural commodity.
Limited resource farmer. A person with:
(1) Direct or indirect gross farm sales not more than $100,000.00 in
each of the previous two years (to be increased starting in fiscal year
2004 to adjust for inflation using Prices Paid by Farmer Index as
compiled by National Agricultural Statistical Service (NASS)); and
(2) A total household income at or below the national poverty level
for a family of four, or less than 50 percent of county median household
income in each of the previous two years (to be determined annually
using Commerce Department Data).
Negligence. The failure to use such care as a reasonably prudent and
careful person would use under similar circumstances.
Non-contiguous. Acreage of an insured crop that is separated from
other acreage of the same insured crop by land that is neither owned by
you nor rented by you for cash or a crop share. However, acreage
separated by only a public or private right-of-way, waterway, or an
irrigation canal will be considered as contiguous.
Offset. The act of deducting one amount from another amount.
Organic agricultural industry. Persons who are employed by the
following organizations: Appropriate Technology Transfer for Rural
Areas, Sustainable Agriculture Research and Education or the Cooperative
State Research, Education and Extension Service, the agricultural
departments of universities, or other persons approved by FCIC, whose
research or occupation is related to the specific organic crop or
practice for which such expertise is sought.
Organic farming practice. A system of plant production practices
approved by a certifying agent in accordance with 7 CFR part 205.
Organic plan. A written plan, in accordance with the National
Organic Program published in 7 CFR part 205, that describes the organic
farming practices that you and a certifying agent agree upon annually or
at such other times as prescribed by the certifying agent.
Organic standards. Standards in accordance with the Organic Foods
Production Act of 1990 (7 U.S.C. 6501 et seq.) and 7 CFR part 205.
Perennial crop. A plant, bush, tree or vine crop that has a life
span of more than one year.
Person. An individual, partnership, association, corporation,
estate, trust, or other legal entity, and wherever applicable, a State
or a political subdivision or agency of a State. ``Person'' does not
include the United States Government or any agency thereof.
Planted acreage. Land in which seed, plants, or trees have been
placed, appropriate for the insured crop and planting method, at the
correct depth, into a seedbed that has been properly prepared for the
planting method and production practice.
Policy. The agreement between you and us to insure an agricultural
commodity and consisting of the accepted application, these Basic
Provisions, the Crop Provisions, the Special Provisions, other
applicable endorsements or options, the actuarial documents for the
insured agricultural commodity, the Catastrophic Risk Protection
Endorsement, if applicable, and the applicable regulations published in
7 CFR chapter IV. Insurance for each agricultural commodity in each
county will constitute a separate policy.
Practical to replant. Our determination, after loss or damage to the
insured crop, based on all factors, including, but not limited to
moisture availability, marketing window, condition of the field, and
time to crop maturity, that replanting the insured crop will allow the
crop to attain maturity prior to the calendar date for the end of the
insurance period. It will be considered to be practical to replant
regardless of availability of seed or plants, or the input costs
necessary to produce the insured crop such as those that would be
incurred for seed or plants, irrigation water, etc.
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Premium billing date. The earliest date upon which you will be
billed for insurance coverage based on your acreage report. The premium
billing date is contained in the Special Provisions.
Prevented planting. Failure to plant the insured crop with proper
equipment by the final planting date designated in the Special
Provisions for the insured crop in the county. You may also be eligible
for a prevented planting payment if you failed to plant the insured crop
with the proper equipment within the late planting period. You must have
been prevented from planting the insured crop due to an insured cause of
loss that is general in the surrounding area and that prevents other
producers from planting acreage with similar characteristics.
Price election. The amounts contained in the Special Provisions, or
an addendum thereto, that is the value per pound, bushel, ton, carton,
or other applicable unit of measure for the purposes of determining
premium and indemnity under the policy.
Production guarantee (per acre). The number of pounds, bushels,
tons, cartons, or other applicable units of measure determined by
multiplying the approved yield per acre by the coverage level percentage
you elect.
Production report. A written record showing your annual production
and used by us to determine your yield for insurance purposes (see
section 3). The report contains yield information for previous years,
including planted acreage and harvested production. This report must be
supported by written verifiable records from a warehouseman or buyer of
the insured crop or by measurement of farm-stored production, or by
other records of production approved by us on an individual case basis.
Prohibited substance. Any biological, chemical, or other agent that
is prohibited from use or is not included in the organic standards for
use on any certified organic, transitional or buffer zone acreage. Lists
of such substances are contained at 7 CFR part 205.
Replanted crop. The same agricultural commodity replanted on the
same acreage as the first insured crop for harvest in the same crop year
if the replanting is specifically made optional by the policy and you
elect to replant the crop and insure it under the policy covering the
first insured crop, or replanting is required by the policy.
Replanting. Performing the cultural practices necessary to prepare
the land to replace the seed or plants of the damaged or destroyed
insured crop and then replacing the seed or plants of the same crop in
the same insured acreage. The same crop does not necessarily mean the
same type or variety of the crop unless different types or varieties
constitute separate crops or it is otherwise specified in the policy.
Representative sample. Portions of the insured crop that must remain
in the field for examination and review by our loss adjuster when making
a crop appraisal, as specified in the Crop Provisions. In certain
instances we may allow you to harvest the crop and require only that
samples of the crop residue be left in the field.
Sales closing date. A date contained in the Special Provisions by
which an application must be filed. The last date by which you may
change your crop insurance coverage for a crop year.
Section. (for the purposes of unit structure) A unit of measure
under a rectangular survey system describing a tract of land usually one
mile square and usually containing approximately 640 acres.
Second crop. With respect to a single crop year, the next occurrence
of planting any agricultural commodity for harvest following a first
insured crop on the same acreage. The second crop may be the same or a
different agricultural commodity as the first insured crop, except the
term does not include a replanted crop. A cover crop, planted after a
first insured crop and planted for the purpose of haying, grazing or
otherwise harvesting in any manner or that is hayed or grazed during the
crop year, or that is otherwise harvested is considered to be a second
crop. A cover crop that is covered by FSA's noninsured crop disaster
assistance program (NAP) or receives other USDA benefits associated with
forage crops will be considered as planted for the purpose of haying,
grazing or otherwise harvesting. A crop meeting the conditions stated
herein will be considered to be a second crop regardless of whether or
not it is insured. Notwithstanding the references to haying and grazing
as harvesting in these Basic Provisions, for the purpose of determining
the end of the insurance period, harvest of the crop will be as defined
in the applicable Crop Provisions.
Share. Your percentage of interest in the insured crop as an owner,
operator, or tenant at the time insurance attaches. However, only for
the purpose of determining the amount of indemnity, your share will not
exceed your share at the earlier of the time of loss or the beginning of
harvest.
Special Provisions. The part of the policy that contains specific
provisions of insurance for each insured crop that may vary by
geographic area.
State. The state shown on your accepted application.
Substantial beneficial interest. An interest held by any person of
at least 10 percent in you. The spouse of any individual applicant or
individual insured will be considered to have a substantial beneficial
interest in the applicant or insured unless the spouses can prove they
are legally separated or otherwise legally separate under state law. Any
child of an individual applicant or individual insured will not be
considered to have a substantial beneficial interest in the applicant
[[Page 106]]
or insured unless the child has a separate legal interest in such
person. For example, there are two partnerships that each have a 50
percent interest in you and each partnership is made up of two
individuals, each with a 50 percent share in the partnership. In this
case, each individual would be considered to have a 25 percent interest
in you, and both the partnerships and the individuals would have a
substantial beneficial interest in you (The spouses of the individuals
would not be considered to have a substantial beneficial interest unless
the spouse was one of the individuals that made up the partnership).
However, if each partnership is made up of six individuals with equal
interests, then each would only have an 8.33 percent interest in you and
although the partnership would still have a substantial beneficial
interest in you, the individuals would not for the purposes of reporting
in section 2.
Summary of coverage. Our statement to you, based upon your acreage
report, specifying the insured crop and the guarantee or amount of
insurance coverage provided by unit.
Sustainable farming practice. A system or process for producing an
agricultural commodity, excluding organic farming practices, that is
necessary to produce the crop and is generally recognized by
agricultural experts for the area to conserve or enhance natural
resources and the environment.
Tenant. A person who rents land from another person for a share of
the crop or a share of the proceeds of the crop (see the definition of
``share'' above).
Termination date. The calendar date contained in the Crop Provisions
upon which your insurance ceases to be in effect because of nonpayment
of any amount due us under the policy, including premium.
Timely planted. Planted on or before the final planting date
designated in the Special Provisions for the insured crop in the county.
Transitional acreage. Acreage on which organic farming practices are
being followed that does not yet qualify to be designated as organic
acreage.
USDA. United States Department of Agriculture.
Void. When the policy is considered not to have existed for a crop
year as a result of concealment, fraud or misrepresentation (see section
27).
Whole farm unit. All insurable acreage of two or more insured crops
planted in the county in which you have a share on the date coverage
begins for each crop for the crop year. All crops for which the whole
farm unit structure is available must be included in the whole farm
unit. At least two of the insured crops must each constitute at least 10
percent of the total liability of all insured crops in the whole farm
unit, and all crops in the unit must be insured under the same plan of
insurance and with the same insurance provider.
Written agreement. A document that alters designated terms of a
policy as authorized under these Basic Provisions, the Crop Provisions,
or the Special Provisions for the insured crop (see section 18).
2. Life of Policy, Cancellation, and Termination
(a) This is a continuous policy and will remain in effect for each
crop year following the acceptance of the original application until
canceled by you in accordance with the terms of the policy or terminated
by operation of the terms of the policy or by us.
(b) Your application for insurance must contain your social security
number (SSN) if you are an individual or employer identification number
(EIN) if you are a person other than an individual, and all SSNs and
EINs, as applicable, of all persons with a substantial beneficial
interest in you, the coverage level, price election, crop, type,
variety, or class, plan of insurance, and any other material information
required on the application to insure the crop. If you or someone with a
substantial beneficial interest is not legally required to have a SSN or
EIN, you must request and receive an identification number for the
purposes of this policy from us or the Internal Revenue Service (IRS) if
such identification number is available from the IRS. If any of the
information regarding persons with a substantial beneficial interest
changes during the crop year, you must revise your application by the
next sales closing date applicable under your policy to reflect the
correct information.
(1) Applications that do not contain your SSN, EIN or identification
number, or any of the other information required in section 2(b) are not
acceptable and insurance will not be provided (Except if you fail to
report the SSNs, EINs or identification numbers of persons with a
substantial beneficial interest in you, the provisions in section
2(b)(2) will apply);
(2) If the application does not contain the SSNs, EINs or
identification numbers of all persons with a substantial beneficial
interest in you, you fail to revise your application in accordance with
section 2(b), or the reported SSNs, EINs or identification numbers are
incorrect and the incorrect SSN, EIN or identification number has not
been corrected by the acreage reporting date, and:
(i) Such persons are eligible for insurance, the amount of coverage
for all crops included on this application will be reduced
proportionately by the percentage interest in you of such persons, you
must repay the amount of indemnity, prevented planting payment or
replanting payment that is proportionate to the interest of the persons
whose SSN, EIN or identification number was unreported or
[[Page 107]]
incorrect for such crops, and your premium will be reduced
commensurately; or
(ii) Such persons are not eligible for insurance, except as provided
in section 2(b)(3), the policy is void and no indemnity, prevented
planting payment or replanting payment will be owed for any crop
included on this application, and you must repay any indemnity,
prevented planting payment or replanting payment that may have been paid
for such crops. If previously paid, the balance of any premium and any
administrative fees will be returned to you, less twenty percent of the
premium that would otherwise be due from you for such crops. If not
previously paid, no premium or administrative fees will be due for such
crops.
(3) The consequences described in section 2(b)(2)(ii) will not apply
if you have included an ineligible person's SSN, EIN or identification
number on your application and do not include the ineligible person's
share on the acreage report.
(c) After acceptance of the application, you may not cancel this
policy for the initial crop year. Thereafter, the policy will continue
in force for each succeeding crop year unless canceled or terminated as
provided below.
(d) Either you or we may cancel this policy after the initial crop
year by providing written notice to the other on or before the
cancellation date shown in the Crop Provisions.
(e) Any amount due to us for any policy authorized under the Act
will be offset from any indemnity or prevented planting payment due you
for this or any other crop insured with us under the authority of the
Act.
(1) Even if your claim has not yet been paid, you must still pay the
premium and administrative fee on or before the termination date for you
to remain eligible for insurance.
(2) If we offset any amount due us from an indemnity or prevented
planting payment owed to you, the date of payment for the purpose of
determining whether you have a delinquent debt will be the date that you
submit the claim for indemnity in accordance with section 14(c) (Your
Duties).
(f) A delinquent debt for any policy will make you ineligible to
obtain crop insurance authorized under the Act for any subsequent crop
year and result in termination of all policies in accordance with
section 2(f)(2).
(1) With respect to ineligibility:
(i) Ineligibility for crop insurance will be effective on:
(A) The date that a policy was terminated in accordance with section
2(f)(2) for the crop for which you failed to pay premium, an
administrative fee, or any related interest owed, as applicable;
(B) The payment due date contained in any notification of
indebtedness for any overpaid indemnity, prevented planting payment or
replanting payment, if you fail to pay the amount owed, including any
related interest owed, as applicable, by such due date;
(C) The termination date for the crop year prior to the crop year in
which a scheduled payment is due under a payment agreement if you fail
to pay the amount owed by any payment date in any agreement to pay the
debt; or
(D) The termination date the policy was or would have been
terminated under sections 2(f)(2)(i)(A), (B) or (C) if your bankruptcy
petition is dismissed before discharge.
(ii) If you are ineligible and a policy has been terminated in
accordance with section 2(f)(2), you will not receive any indemnity,
prevented planting payment or replanting payment, if applicable, and
such ineligibility and termination of the policy may affect your
eligibility for benefits under other USDA programs. Any indemnity,
prevented planting payment or replanting payment that may be owed for
the policy before it has been terminated will remain owed to you, but
may be offset in accordance with section 2(e), unless your policy was
terminated in accordance with sections 2(f)(2)(i)(D) or (E).
(2) With respect to termination:
(i) Termination will be effective on:
(A) For a policy with unpaid administrative fees or premiums, the
termination date immediately subsequent to the billing date for the crop
year;
(B) For a policy with other amounts due, the termination date
immediately following the date you have a delinquent debt;
(C) For each policy for which insurance has attached before you
become ineligible, the termination date immediately following the date
you become ineligible;
(D) For execution of an agreement to pay any amounts owed and
failure to make any scheduled payment, the termination date for the crop
year prior to the crop year in which you failed to make the scheduled
payment; or
(E) For dismissal of a bankruptcy petition before discharge, the
termination date the policy was or would have been terminated under
sections 2(f)(2)(i)(A), (B) or (C).
(ii) For all policies terminated under sections 2(f)(2)(i)(D) and
(E), any indemnities, prevented planting payments or replanting payments
paid subsequent to the termination date must be repaid.
(iii) Once the policy is terminated, it cannot be reinstated for the
current crop year unless the termination was in error. Failure to timely
pay because of illness, bad weather, or other such extenuating
circumstances is not grounds for reinstatement in the current year.
(3) To regain eligibility, you must:
(i) Repay the delinquent debt in full;
(ii) Execute an agreement to pay any amounts owed and make payments
in accordance with the agreement (We will not enter into an agreement
with you to pay the
[[Page 108]]
amounts owed if you have previously failed to make a scheduled payment
under the terms of any other agreement to pay with us or any other
insurance provider); or
(iii) File a petition to have your debts discharged in bankruptcy
(Dismissal of the bankruptcy petition before discharge will terminate
all policies in effect retroactive to the date your policy would have
been terminated in accordance with section 2(f)(2)(i));
(4) After you become eligible for crop insurance, if you want to
obtain coverage for your crops, you must submit a new application on or
before the sales closing date for the crop (Since applications for crop
insurance cannot be accepted after the sales closing date, if you make
any payment after the sales closing date, you cannot apply for insurance
until the next crop year);
(5) For example, for the 2003 crop year, if crop A, with a
termination date of October 31, 2003, and crop B, with a termination
date of March 15, 2004, are insured and you do not pay the premium for
crop A by the termination date, you are ineligible for crop insurance as
of October 31, 2003, and crop A's policy is terminated as of that date.
Crop B's policy does not terminate until March 15, 2004, and an
indemnity for the 2003 crop year may still be owed. If you enter an
agreement to repay amounts owed on September 25, 2004, the earliest date
by which you can obtain crop insurance for crop A is to apply for crop
insurance by the October 31, 2004, sales closing date and for crop B is
to apply for crop insurance by the March 15, 2005, sales closing date.
If you fail to make a payment that was scheduled to be made on April 1,
2005, your policy will terminate as of October 31, 2004, for crop A, and
March 15, 2005, for crop B, and no indemnity, prevented planting payment
or replanting payment will be due for that crop year for either crop.
You will not be eligible to apply for crop insurance for any crop until
after the amounts owed are paid in full or you file a petition to
discharge the debt in bankruptcy.
(6) If you are determined to be ineligible under section 2(f),
persons with a substantial beneficial interest in you may also be
ineligible until you become eligible again.
(g) If you die, disappear, or are judicially declared incompetent,
or if you are an entity other than an individual and such entity is
dissolved, the policy will terminate as of the date of death, judicial
declaration, or dissolution. If such event occurs after coverage begins
for any crop year, the policy will continue in force through the crop
year and terminate at the end of the insurance period and any indemnity
will be paid to the person or persons determined to be beneficially
entitled to the indemnity. The premium will be deducted from the
indemnity or collected from the estate. Death of a partner in a
partnership will dissolve the partnership unless the partnership
agreement provides otherwise. If two or more persons having a joint
interest are insured jointly, death of one of the persons will dissolve
the joint entity.
(h) We may cancel your policy if no premium is earned for 3
consecutive years.
(i) The cancellation and termination dates are contained in the Crop
Provisions.
(j) When obtaining catastrophic, or additional coverage, you must
provide information regarding crop insurance coverage on any crop
previously obtained at any other local FSA office or from an approved
insurance provider, including the date such insurance was obtained and
the amount of the administrative fee.
(k) Any person may sign any document relative to crop insurance
coverage on behalf of any other person covered by such a policy,
provided that the person has a properly executed power of attorney or
such other legally sufficient document authorizing such person to sign.
You are still responsible for the accuracy of all information provided
on your behalf and may be subject to the consequences in section 6(g),
and any applicable consequences, if any information has been
misreported.
3. Insurance Guarantees, Coverage Levels, and Prices.
(a) Unless adjusted or limited in accordance with your policy, the
production guarantee or amount of insurance, coverage level, and price
at which an indemnity will be determined for each unit will be those
used to calculate your summary of coverage for each crop year.
(b) You must select the same coverage, catastrophic risk protection
or additional coverage, and select one level of additional coverage for
all acreage of the crop in the county unless one of the following
applies:
(1) The applicable Crop Provisions allow you the option to
separately insure individual crop types or varieties. In this case, each
individual type or variety insured by you will be subject to separate
administrative fees. For example, if two grape varieties in California
are insured under the Catastrophic Risk Protection Endorsement and two
varieties are insured under an additional coverage policy, a separate
administrative fee will be charged for each of the four varieties.
Although insurance may be elected by type or variety in these instances,
failure to insure a type or variety that is of economic significance may
result in the denial of other farm program benefits unless you execute a
waiver of any eligibility for emergency crop loss assistance in
connection with the crop.
(2) If you have additional coverage for the crop in the county and
the acreage has been designated as ``high risk'' by FCIC, you will be
able to obtain a High Risk Land Exclusion Option for the high risk land
under the additional coverage policy and insure the high risk acreage
under a separate Catastrophic
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Risk Protection Endorsement, provided that the Catastrophic Risk
Protection Endorsement is obtained from the same insurance provider from
which the additional coverage was obtained.
(c) In addition to the price election or amount of insurance
available on the contract change date, we may provide an additional
price election or amount of insurance no later than 15 days prior to the
sales closing date. You must select the additional price election or
amount of insurance on or before the sales closing date for the insured
crop. These additional price elections or amounts of insurance will not
be less than those available on the contract change date. If you elect
the additional price election or amount of insurance, any claim
settlement and amount of premium will be based on this amount.
(d) You may change the coverage level, price election, or amount of
insurance for the following crop year by giving written notice to us not
later than the sales closing date for the insured crop. Since the price
election or amount of insurance may change each year, if you do not
select a new price election or amount of insurance on or before the
sales closing date, we will assign a price election or amount of
insurance which bears the same relationship to the price election
schedule as the price election or amount of insurance that was in effect
for the preceding year. (For example: If you selected 100 percent of the
market price for the previous crop year and you do not select a new
price election for the current crop year, we will assign 100 percent of
the market price for the current crop year.)
(e) You must report production to us for the previous crop year by
the earlier of the acreage reporting date or 45 days after the
cancellation date unless otherwise stated in the Special Provisions:
(1) If you do not provide the required production report, we will
assign a yield for the previous crop year. The yield assigned by us will
not be more than 75 percent of the yield used by us to determine your
coverage for the previous crop year. The production report or assigned
yield will be used to compute your approved yield for the purpose of
determining your coverage for the current crop year.
(2) If you have filed a claim for any crop year, the documents
signed by you which state the amount of production used to complete the
claim for indemnity will be the production report for that year unless
otherwise specified by FCIC.
(3) Production and acreage for the prior crop year must be reported
for each proposed optional unit by the production reporting date. If you
do not provide the information stated above, the optional units will be
combined into the basic unit.
(4) Appraisals obtained from only a portion of the acreage in a
field that remains unharvested after the remainder of the crop within
the field has been destroyed or put to another use will not be used to
establish your actual yield unless representative samples are required
to be left by you in accordance with the Crop Provisions.
(f) It is your responsibility to accurately report all information
that is used to determine your approved yield. You must certify to the
accuracy of this information on your production report.
(1) If you do not have written verifiable records to support the
information on your production report, you will receive an assigned
yield in accordance with section 3(e)(1) and 7 CFR part 400, subpart G
for those crop years for which you do not have such records.
(2) If you misreport any material information used to determine your
approved yield:
(i) We will correct the unit structure, if necessary; and
(ii) You will be subject to the provisions regarding misreporting
contained in section 6(g), unless we correct the information because the
incorrect information was the result of our error or the error of
someone from USDA.
(g) In addition to any consequences in section 3(f), at any time the
circumstances described below are discovered, your approved yield will
be adjusted:
(1) By including an assigned yield determined in accordance with
section 3(e)(1) and 7 CFR part 400, subpart G, if the actual yield
reported in the database is excessive for any crop year, as determined
by FCIC under its procedures, and you do not provide verifiable records
to support the yield in the database (If there are verifiable records
for the yield in your database, the yield is significantly different
from the other yields in the county or your other yields for the crop
and you cannot prove there is a valid basis to support the differences
in the yields, the yield will be the average of the yields for the crop
or the applicable county transitional yield if you have no other yields
for the crop, and you may be subject to the provisions of section 27);
(2) By reducing it to an amount consistent with the average of the
approved yields for other databases for your farming operation with the
same crop, type, and practice or the county transitional yield, as
applicable, if:
(i) The approved APH yield is greater than 115 percent of the
average of the approved yields of all applicable databases for your
farming operation that have actual yields in them or it is greater than
115 percent of the county transitional yield if no applicable databases
exist for comparison; and
[[Page 110]]
(ii) The current year's insured acreage (including applicable
prevented planting acreage) is greater than 400 percent of the average
number of acres in the database or the acres contained in two or more
individual years in the database are each less than 10 percent of the
current year's insurable acreage in the unit (including applicable
prevented planting acreage); or
(3) To an amount consistent with the production methods actually
carried out for the crop year if you use a different production method
than was previously used and the production method actually carried out
is likely to result in a yield lower than the average of your previous
actual yields. The yield will be adjusted based on your other units
where such production methods were carried out or to the applicable
county transitional yield for the production methods if other such units
do not exist. You must notify us of changes in your production methods
by the acreage reporting date. If you fail to notify us, in addition to
the reduction of your approved yield described herein, you will be
considered to have misreported information and you will be subject to
the consequences in section 6(g). For example, for a non-irrigated unit,
your yield is based upon acreage of the crop that is watered once prior
to planting, and the crop is not watered prior to planting for the
current crop year. Your approved APH yield will be reduced to an amount
consistent with the actual production history of your other non-
irrigated units where the crop has not been watered prior to planting or
limited to the non-irrigated transitional yield for the unit if other
such units do not exist.
(h) Unless you meet the double cropping requirements contained in
section 17(f)(4), if you elect to plant a second crop on acreage where
the first insured crop was prevented from being planted, you will
receive a yield equal to 60 percent of the approved yield for the first
insured crop to calculate your average yield for subsequent crop years
(Not applicable to crops if the APH is not the basis for the insurance
guarantee). If the unit contains both prevented planting and planted
acreage of the same crop, the yield for such acreage will be determined
by:
(1) Multiplying the number of insured prevented planting acres by 60
percent of the approved yield for the first insured crop;
(2) Adding the totals from section 3(h)(1) to the amount of
appraised or harvested production for all of the insured planted
acreage; and
(3) Dividing the total in section 3(h)(2) by the total number of
acres in the unit.
(i) Hail and fire coverage may be excluded from the covered causes
of loss for an insured crop only if you select additional coverage of
not less than 65 percent of the approved yield indemnified at the 100
percent price election, or an equivalent coverage as established by
FCIC, and you have purchased the same or a higher dollar amount of
coverage for hail and fire from us or any other source.
(j) The applicable premium rate, or formula to calculate the premium
rate, and transitional yield will be those contained in the actuarial
documents except, in the case of high risk land, a written agreement may
be requested to change such transitional yield or premium rate.
4. Contract Changes
(a) We may change the terms of your coverage under this policy from
year to year.
(b) Any changes in policy provisions, amounts of insurance, premium
rates, program dates, and price elections (except as allowed herein or
as specified in section 3) can be viewed on the RMA Web site at http://
www.rma.usda.gov/ or a successor Web site not later than the contract
change date contained in the Crop Provisions. We may only revise this
information after the contract change date to correct clear errors (For
example, the price election for corn was announced at $25.00 per bushel
instead of $2.50 per bushel or the final planting date should be May 10
but the final planting date in the Special Provisions states August 10).
(c) After the contract change date, all changes specified in section
4(b) will also be available upon request from your crop insurance agent.
You will be provided, in writing, a copy of the changes to the Basic
Provisions and Crop Provisions and a copy of the Special Provisions not
later than 30 days prior to the cancellation date for the insured crop.
Acceptance of the changes will be conclusively presumed in the absence
of notice from you to change or cancel your insurance coverage.
5. [Reserved]
6. Report of Acreage
(a) An annual acreage report must be submitted to us on our form for
each insured crop in the county on or before the acreage reporting date
contained in the Special Provisions, except as follows:
(1) If you insure multiple crops with us that have final planting
dates on or after August 15 but before December 31, you must submit an
acreage report for all such crops on or before the latest applicable
acreage reporting date for such crops; and
(2) If you insure multiple crops with us that have final planting
dates on or after December 31 but before August 15, you must submit an
acreage report for all such crops on or before the latest applicable
acreage reporting date for such crops.
(3) Notwithstanding the provisions in sections 6(a) (1) and (2):
(i) If the Special Provisions designate separate planting periods
for a crop, you must
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submit an acreage report for each planting period on or before the
acreage reporting date contained in the Special Provisions for the
planting period; and
(ii) If planting of the insured crop continues after the final
planting date or you are prevented from planting during the late
planting period, the acreage reporting date will be the later of:
(A) The acreage reporting date contained in the Special Provisions;
(B) The date determined in accordance with sections (a)(1) or (2);
or
(C) Five (5) days after the end of the late planting period for the
insured crop, if applicable.
(b) If you do not have a share in an insured crop in the county for
the crop year, you must submit an acreage report, on or before the
acreage reporting date, so indicating.
(c) Your acreage report must include the following information, if
applicable:
(1) All acreage of the crop in the county (insurable and not
insurable) in which you have a share;
(2) Your share at the time coverage begins;
(3) The practice;
(4) The type; and
(5) The date the insured crop was planted.
(d) Regarding the ability to revise an acreage report you have
submitted to us:
(1) For planted acreage, you cannot revise any information
pertaining to the planted acreage after the acreage reporting date
without our consent (Consent may only be provided when no cause of loss
has occurred; our appraisal has determined that the insured crop will
produce at least 90 percent of the yield used to determine your
guarantee or the amount of insurance for the unit (including reported
and unreported acreage), except when there are unreported units (see
section 6(f)); the information on the acreage report is clearly
transposed; you provide adequate evidence that we or someone from USDA
have committed an error regarding the information on your acreage
report; or if expressly permitted by the policy);
(2) For prevented planting acreage reported on the acreage report,
you cannot revise any information pertaining to the prevented planting
acreage after the report is initially submitted to us without our
consent (Consent may only be provided when information on the acreage
report is clearly transposed or you provide adequate evidence that we or
someone from USDA have committed an error regarding the information on
your acreage report);
(3) For prevented planting acreage not reported on the acreage
report, you cannot revise your acreage report to add prevented planting
acreage;
(4) If you request an acreage measurement prior to the acreage
reporting date and submit documentation of such request and an acreage
report with estimated acreage by the acreage reporting date, you must
provide the measurement to us, we will revise your acreage report if
there is a discrepancy, and no indemnity, prevented planting payment or
replant payment will be paid until the acreage measurement has been
received by us (Failure to provide the measurement to us will result in
the application of section 6(g) if the estimated acreage is not correct
and estimated acreage under this section will no longer be accepted for
any subsequent acreage report);
(5) If there is an irreconcilable difference between:
(i) The acreage measured by FSA or a measuring service and our on-
farm measurement, our on-farm measurement will be used; or
(ii) The acreage measured by a measuring service, other than our on-
farm measurement, and FSA, the FSA measurement will be used; and
(6) If the acreage report has been revised in accordance with
section 6(d)(1), (2), (4), or (5), the information on the initial
acreage report will not be considered misreported for the purposes of
section 6(g).
(e) We may elect to determine all premiums and indemnities based on
the information you submit on the acreage report or upon the factual
circumstances we determine to have existed, subject to the provisions
contained in section 6(g).
(f) If you do not submit an acreage report by the acreage reporting
date, or if you fail to report all units, we may elect to determine by
unit the insurable crop acreage, share, type and practice, or to deny
liability on such units. If we deny liability for the unreported units,
your share of any production from the unreported units will be
allocated, for loss purposes only, as production to count to the
reported units in proportion to the liability on each reported unit.
However, such production will not be allocated to prevented planting
acreage or otherwise affect any prevented planting payment.
(g) You must provide all required reports and you are responsible
for the accuracy of all information contained in those reports. You
should verify the information on all such reports prior to submitting
them to us.
(1) If you submit information on any report that is different than
what is determined to be correct and such information results in:
(i) A lower liability than the actual liability determined, the
production guarantee or amount of insurance on the unit will be reduced
to an amount consistent with the reported information (In the event the
insurable acreage is under-reported for any unit, all production or
value from insurable acreage in that unit will be considered production
or value to count in determining the indemnity); or
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(ii) A higher liability than the actual liability determined, the
information contained in the acreage report will be revised to be
consistent with the correct information.
(2) In addition to the other adjustments specified in section
6(g)(1), if you misreport any information that results in liability
greater than 110.0 percent or lower than 90.0 percent of the actual
liability determined for the unit, any indemnity, prevented planting
payment, or replanting payment will be based on the amount of liability
determined in accordance with section 6(g)(1)(i) or (ii) and will be
reduced in an amount proportionate with the amount of liability that is
misreported in excess of the tolerances stated in this section (For
example, if the actual liability is determined to be $100.00, but you
reported liability of $120.00, any indemnity, prevented planting payment
or replanting payment will be reduced by 10.0 percent ($120.00 / $100.00
= 1.20, and 1.20 - 1.10 = 0.10)).
(h) If we discover you have incorrectly reported any information on
the acreage report for any crop year, you may be required to provide
documentation in subsequent crop years substantiating your report of
acreage for those crop years, including, but not limited to, an acreage
measurement service at your own expense. If the correction of any
misreported information would affect an indemnity, prevented planting
payment or replant payment that was paid in a prior crop year, such
claim will be adjusted and you will be required to repay any overpaid
amounts.
(i) Errors in reporting units may be corrected by us at the time of
adjusting a loss to reduce our liability and to conform to applicable
unit division guidelines.
7. Annual Premium and Administrative Fees
(a) The annual premium is earned and payable at the time coverage
begins. You will be billed for the premium and administrative fee not
earlier than the premium billing date specified in the Special
Provisions.
(b) Premium or administrative fees owed by you will be offset from
an indemnity or prevented planting payment due you in accordance with
section 2(e).
(c) The annual premium amount is determined, as applicable, by
either:
(1) Multiplying the production guarantee per acre times the price
election, times the premium rate, times the insured acreage, times your
share at the time coverage begins, and times any premium adjustment
percentages that may apply; or
(2) Multiplying the amount of insurance per acre times the premium
rate, times the insured acreage, times your share at the time coverage
begins, and times any premium adjustment percentages that may apply.
(d) The premium will be computed using the price election or amount
of insurance you elect or that we assign in accordance with section
3(d). The information needed to determine the premium rate and any
premium adjustment percentages that may apply are contained in the
actuarial documents or an approved written agreement.
(e) In addition to the premium charged:
(1) You, unless otherwise authorized in 7 CFR part 400, must pay an
administrative fee each crop year of $30 per crop per county for all
levels of coverage in excess of catastrophic risk protection.
(2) The administrative fee must be paid no later than the time that
premium is due.
(3) Payment of an administrative fee will not be required if you
file a bona fide zero acreage report on or before the acreage reporting
date for the crop. If you falsely file a zero acreage report you may be
subject to criminal and administrative sanctions.
(4) The administrative fee will be waived if you request it and:
(i) You qualify as a limited resource farmer; or
(ii) You were insured prior to the 2005 crop year or for the 2005
crop year and your administrative fee was waived for one or more of
those crop years because you qualified as a limited resource farmer
under a policy definition previously in effect, and you remain qualified
as a limited resource farmer under the definition that was in effect at
the time the administrative fee was waived.
(5)-(6) [Reserved]
(7) Failure to pay the administrative fees when due may make you
ineligible for certain other USDA benefits.
(f) If the amount of premium (gross premium less premium subsidy
paid on your behalf by FCIC) and administrative fee you are required to
pay for any acreage exceeds the liability for the acreage, coverage for
those acres will not be provided (no premium or administrative fee will
be due and no indemnity will be paid for such acreage).
8. Insured Crop
(a) The insured crop will be that shown on your accepted application
and as specified in the Crop Provisions or Special Provisions and must
be grown on insurable acreage.
(b) A crop which will NOT be insured will include, but will not be
limited to, any crop:
(1) That is not grown on planted acreage (except for the purposes of
prevented planting coverage), or that is a type, class or variety or
where the conditions under which the crop is planted are not generally
recognized for the area (For example, where agricultural experts
determine that planting a non-irrigated corn crop after a failed small
grain crop on the same acreage in the same crop year is not appropriate
for the area);
(2) For which the information necessary for insurance (price
election, premium rate,
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etc.) is not included in the actuarial documents, unless such
information is provided by a written agreement;
(3) That is a volunteer crop;
(4) Planted following the same crop on the same acreage and the
first planting of the crop has been harvested in the same crop year
unless specifically permitted by the Crop Provisions or the Special
Provisions (For example, the second planting of grain sorghum would not
be insurable if grain sorghum had already been planted and harvested on
the same acreage during the crop year);
(5) That is planted for the development or production of hybrid seed
or for experimental purposes, unless permitted by the Crop Provisions or
by written agreement to insure such crop; or
(6) That is used solely for wildlife protection or management. If
the lease states that specific acreage must remain unharvested, only
that acreage is uninsurable. If the lease specifies that a percentage of
the crop must be left unharvested, your share will be reduced by such
percentage.
(c) Although certain policy documents may state that a crop type,
class, variety or practice is not insurable, it does not mean all other
crop types, classes, varieties or practices are insurable. To be
insurable the crop type, class, variety or practice must meet all the
conditions in this section.
9. Insurable Acreage
(a) Acreage planted to the insured crop in which you have a share is
insurable except acreage:
(1) That has not been planted and harvested or insured (including
insured acreage that was prevented from being planted) in at least one
of the three previous crop years unless you can show that:
(i) Such acreage was not planted:
(A) In at least two of the previous three crop years to comply with
any other USDA program;
(B) Because of crop rotation, (e.g., corn, soybeans, alfalfa; and
the alfalfa remained for four years before the acreage was planted to
corn again); or
(C) Because a perennial tree, vine, or bush crop was grown on the
acreage;
(ii) The Crop Provisions or a written agreement specifically allow
insurance for such acreage; or
(iii) Such acreage constitutes five percent or less of the insured
planted acreage in the unit;
(2) That has been strip-mined, unless otherwise approved by written
agreement, or unless an agricultural commodity other than a cover, hay,
or forage crop (except corn silage), has been harvested from the acreage
for at least five crop years after the strip-mined land was reclaimed;
(3) For which the actuarial documents do not provide the information
necessary to determine the premium rate, unless insurance is allowed by
a written agreement;
(4) On which the insured crop is damaged and it is practical to
replant the insured crop, but the insured crop is not replanted;
(5) That is interplanted, unless allowed by the Crop Provisions;
(6) That is otherwise restricted by the Crop Provisions or Special
Provisions;
(7) That is planted in any manner other than as specified in the
policy provisions for the crop unless a written agreement to such
planting exists;
(8) Of a second crop, if you elect not to insure such acreage when
an indemnity for a first insured crop may be subject to reduction in
accordance with the provisions of section 15 and you intend to collect
an indemnity payment that is equal to 100 percent of the insurable loss
for the first insured crop acreage. This election must be made on a
first insured crop unit basis. For example, if the first insured crop
unit contains 40 planted acres that may be subject to an indemnity
reduction, then no second crop can be insured on any of the 40 acres. In
this case:
(i) If the first insured crop is insured under this policy, you must
provide written notice to us of your election not to insure acreage of a
second crop at the time the first insured crop acreage is released by us
(if no acreage in the first insured crop unit is released, this election
must be made by the earlier of the acreage reporting date for the second
crop or when you sign the claim for indemnity for the first insured
crop) or, if the first insured crop is insured under the Group Risk
Protection Plan of Insurance (7 CFR part 407), this election must be
made before the second crop insured under this policy is planted, and if
you fail to provide such notice, the second crop acreage will be insured
in accordance with the applicable policy provisions and you must repay
any overpaid indemnity for the first insured crop;
(ii) In the event a second crop is planted and insured with a
different insurance provider, or planted and insured by a different
person, you must provide written notice to each insurance provider that
a second crop was planted on acreage on which you had a first insured
crop; and
(iii) You must report the crop acreage that will not be insured on
the applicable acreage report; or
(9) Of a crop planted following a second crop or following an
insured crop that is prevented from being planted after a first insured
crop, unless it is a practice that is generally recognized by
agricultural experts or the organic agricultural industry for the area
to plant three or more crops for harvest on the same acreage in the same
crop year, and additional coverage insurance provided under the
authority of the Act is offered for
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the third or subsequent crop in the same crop year. Insurance will only
be provided for a third or subsequent crop as follows:
(i) You must provide records acceptable to us that show:
(A) You have produced and harvested the insured crop following two
other crops harvested on the same acreage in the same crop year in at
least two of the last four years in which you produced the insured crop;
or
(B) The applicable acreage has had three or more crops produced and
harvested on it in at least two of the last four years in which the
insured crop was grown on it; and
(ii) The amount of insurable acreage will not exceed 100 percent of
the greatest number of acres for which you provide the records required
in section 9(a)(9)(i)(A) or (B).
(b) If insurance is provided for an irrigated practice, you must
report as irrigated only that acreage for which you have adequate
facilities and adequate water, or the reasonable expectation of
receiving adequate water at the time coverage begins, to carry out a
good irrigation practice. If you knew or had reason to know that your
water may be reduced before coverage begins, no reasonable expectation
exists.
(c) Notwithstanding the provisions in section 8(b)(2), if acreage is
irrigated and we do not provide a premium rate for an irrigated
practice, you may either report and insure the irrigated acreage as
``non-irrigated,'' or report the irrigated acreage as not insured.
(d) We may restrict the amount of acreage that we will insure to the
amount allowed under any acreage limitation program established by the
United States Department of Agriculture if we notify you of that
restriction prior to the sales closing date.
10. Share Insured
(a) Insurance will attach only to the share of the person completing
the application and will not extend to any other person having a share
in the crop unless the application clearly states that:
(1) The insurance is requested for an entity such as a partnership
or a joint venture; or
(2) You as landlord will insure your tenant's share, or you as
tenant will insure your landlord's share. In this event, you must
provide evidence of the other party's approval (lease, power of
attorney, etc.). Such evidence will be retained by us. You also must
clearly set forth the percentage shares of each person on the acreage
report. For each landlord or tenant that is an individual, you must
report the landlord's or tenant's social security number. For each
landlord or tenant that is a person other than an individual or for a
trust administered by the Bureau of Indian Affairs, you must report each
landlord's or tenant's social security number, employer identification
number, or other identification number assigned for the purposes of this
policy.
(b) We may consider any acreage or interest reported by or for your
spouse, child or any member of your household to be included in your
share.
(c) Acreage rented for a percentage of the crop, or a lease
containing provisions for both a minimum payment (such as a specified
amount of cash, bushels, pounds, etc.,) and a crop share will be
considered a crop share lease.
(d) Acreage rented for cash, or a lease containing provisions for
either a minimum payment or a crop share (such as a 50/50 share or
$100.00 per acre, whichever is greater) will be considered a cash lease.
11. Insurance Period
(a) Except for prevented planting coverage (see section 17),
coverage begins on each unit or part of a unit at the later of:
(1) The date we accept your application (For the purposes of this
paragraph, the date of acceptance is the date that you submit a properly
executed application in accordance with section 2);
(2) The date the insured crop is planted; or
(3) The calendar date contained in the Crop Provisions for the
beginning of the insurance period.
(b) Coverage ends at the earliest of:
(1) Total destruction of the insured crop on the unit;
(2) Harvest of the unit;
(3) Final adjustment of a loss on a unit;
(4) The calendar date contained in the Crop Provisions for the end
of the insurance period;
(5) Abandonment of the crop on the unit; or
(6) As otherwise specified in the Crop Provisions.
12. Causes of Loss
The insurance provided is against only unavoidable loss directly
caused by specific causes of loss contained in the Crop Provisions. All
specified causes of loss, except where the Crop Provisions specifically
cover loss of revenue due to a reduced price in the marketplace, must be
due to a naturally occurring event. All other causes of loss, including
but not limited to the following, are NOT covered:
(a) Negligence, mismanagement, or wrongdoing by you, any member of
your family or household, your tenants, or employees;
(b) Failure to follow recognized good farming practices for the
insured crop;
(c) Water that is contained by or within structures that are
designed to contain a specific amount of water, such as dams, locks or
reservoir projects, etc., on any acreage when such water stays within
the designed limits (For example, a dam is designed to contain water to
an elevation of
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1,200 feet but you plant a crop on acreage at an elevation of 1,100
feet. A storm causes the water behind the dam to rise to an elevation of
1,200 feet. Under such circumstances, the resulting damage would not be
caused by an insurable cause of loss. However, if you planted on acreage
that was above 1,200 feet elevation, any damage caused by water that
exceeded that elevation would be caused by an insurable cause of loss);
(d) Failure or breakdown of the irrigation equipment or facilities
unless the failure or breakdown is due to a cause of loss specified in
the Crop Provisions (If damage is due to an insured cause, you must make
all reasonable efforts to restore the equipment or facilities to proper
working order within a reasonable amount of time unless we determine it
is not practical to do so. Cost will not be considered when determining
whether it is practical to restore the equipment or facilities);
(e) Failure to carry out a good irrigation practice for the insured
crop, if applicable; or
(f) Any cause of loss that results in damage that is not evident or
would not have been evident during the insurance period, including, but
not limited to, damage that only becomes evident after the end of the
insurance period unless expressly authorized in the Crop Provisions.
Even though we may not inspect the damaged crop until after the end of
the insurance period, damage due to insured causes that would have been
evident during the insurance period will be covered.
13. Replanting Payment
(a) If allowed by the Crop Provisions, a replanting payment may be
made on an insured crop replanted after we have given consent and the
acreage replanted is at least the lesser of 20 acres or 20 percent of
the insured planted acreage for the unit (as determined on the final
planting date or within the late planting period if a late planting
period is applicable).
(b) No replanting payment will be made on acreage:
(1) On which our appraisal establishes that production will exceed
the level set by the Crop Provisions;
(2) Initially planted prior to the earliest planting date
established by the Special Provisions; or
(3) On which one replanting payment has already been allowed for the
crop year.
(c) The replanting payment per acre will be your actual cost for
replanting, but will not exceed the amount determined in accordance with
the Crop Provisions.
(d) No replanting payment will be paid if we determine it is not
practical to replant.
14. Duties in the Event of Damage, Loss, Abandonment, Destruction, or
Alternative Use of Crop or Acreage
Your Duties--
(a) In case of damage to any insured crop you must:
(1) Protect the crop from further damage by providing sufficient
care;
(2) Give us notice within 72 hours of your initial discovery of
damage (but not later than 15 days after the end of the insurance
period), by unit, for each insured crop;
(3) If representative samples are required by the Crop Provisions,
leave representative samples intact of the unharvested crop if you
report damage less than 15 days before the time you begin harvest or
during harvest of the damaged unit (The samples must be left intact
until we inspect them or until 15 days after completion of harvest on
the unit, whichever is earlier. Unless otherwise specified in the Crop
Provisions or Special Provisions, the samples of the crop in each field
in the unit must be 10 feet wide and extend the entire length of the
row, if the crop is planted in rows, or if the crop is not planted in
rows, the longest dimension of the field. The period to retain
representative samples may be extended if it is necessary to accurately
determine the loss. You will be notified in writing of any such
extension); and
(4) Cooperate with us in the investigation or settlement of the
claim, and, as often as we reasonably require:
(i) Show us the damaged crop;
(ii) Allow us to remove samples of the insured crop; and
(iii) Provide us with records and documents we request and permit us
to make copies.
(b) You must obtain consent from us before, and notify us after you:
(1) Destroy any of the insured crop that is not harvested;
(2) Put the insured crop to an alternative use;
(3) Put the acreage to another use; or
(4) Abandon any portion of the insured crop. We will not give
consent for any of the actions in sections 14(b) (1) through (4) if it
is practical to replant the crop or until we have made an appraisal of
the potential production of the crop.
(c) In addition to complying with the notice requirements, you must
submit a claim for indemnity declaring the amount of your loss not later
than 60 days after the end of the insurance period unless you request an
extension in writing and we agree to such extension. Extensions will
only be granted if the amount of the loss cannot be determined within
such time period because the information needed to determine the amount
of the loss is not available. The claim for indemnity must include all
information we require to settle the claim. Failure to submit a
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claim or provide the required information will result in no indemnity,
prevented planting payment or replant payment (Even though no indemnity
or other payment is due, you will still be required to pay the premium
due under the policy for the unit).
(d) You must:
(1) Provide a complete harvesting and marketing record of each
insured crop by unit including separate records showing the same
information for production from any acreage not insured. In addition, if
you insure any acreage that may be subject to an indemnity reduction as
specified in section 15(e)(2) (for example, you planted a second crop on
acreage where a first insured crop had an insurable loss and you do not
qualify for the double cropping exemption), you must provide separate
records of production from such acreage for all insured crops planted on
the acreage. For example, if you have an insurable loss on 10 acres of
wheat and subsequently plant cotton on the same 10 acres, you must
provide records of the wheat and cotton production on the 10 acres
separate from any other wheat and cotton production that may be planted
in the same unit. If you fail to provide such separate records, we will
allocate the production of each crop to the acreage in proportion to our
liability for the acreage; and
(2) Upon our request, or that of any USDA employee authorized to
conduct investigations of the crop insurance program, submit to an
examination under oath.
(e) You must establish the total production or value received for
the insured crop on the unit, that any loss of production or value
occurred during the insurance period, and that the loss of production or
value was directly caused by one or more of the insured causes specified
in the Crop Provisions.
(f) In the event you are prevented from planting an insured crop
which has prevented planting coverage, you must notify us within 72
hours after:
(1) The final planting date, if you do not intend to plant the
insured crop during the late planting period or if a late planting
period is not applicable; or
(2) You determine you will not be able to plant the insured crop
within any applicable late planting period.
(g) All notices required in this section that must be received by us
within 72 hours may be made by telephone or in person to your crop
insurance agent but must be confirmed in writing within 15 days.
(h) It is your duty to prove you have complied with all provisions
of this policy.
(1) Failure to comply with the requirements of section 14(c) (Your
Duties) will result in denial of your claim for indemnity or prevented
planting or replant payment for the acreage for which the failure
occurred. Failure to comply with all other requirements of this section
will result in denial of your claim for indemnity or prevented planting
or replant payment for the acreage for which the failure occurred,
unless we still have the ability to accurately adjust the loss (Even
though no indemnity or other payment is due, you will still be required
to pay the premium due under the policy for the unit); and
(2) Failure to comply with other sections of the policy will subject
you to the consequences specified in those sections.
Our Duties--
(a) If you have complied with all the policy provisions, we will pay
your loss within 30 days after the later of:
(1) We reach agreement with you;
(2) Completion of arbitration, reconsideration of determinations
regarding good farming practices or any other appeal that results in an
award in your favor, unless we exercise our right to appeal such
decision;
(3) Completion of any investigation by USDA, if applicable, of your
current or any past claim for indemnity if no evidence of wrongdoing has
been found (If any evidence of wrongdoing has been discovered, the
amount of any indemnity, prevented planting or replant overpayment as a
result of such wrongdoing may be offset from any indemnity or prevented
planting payment owed to you); or
(4) The entry of a final judgment by a court of competent
jurisdiction.
(b) In the event we are unable to pay your loss within 30 days, we
will give you notice of our intentions within the 30-day period.
(c) We may defer the adjustment of a loss until the amount of loss
can be accurately determined. We will not pay for additional damage
resulting from your failure to provide sufficient care for the crop
during the deferral period.
(d) We recognize and apply the loss adjustment procedures
established or approved by the Federal Crop Insurance Corporation.
15. Production Included in Determining an Indemnity and Payment
Reductions.
(a) The total production to be counted for a unit will include all
production determined in accordance with the policy.
(b) Appraised production will be used to calculate your claim if you
are not going to harvest your acreage. Such appraisals may be conducted
after the end of the insurance period. If you harvest the crop after the
crop has been appraised:
(1) You must provide us with the amount of harvested production; and
(2) If the harvested production exceeds the appraised production,
claims will be adjusted using the harvested production, and you will be
required to repay any overpaid indemnity; or
(3) If the harvested production is less than the appraised
production, and:
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(i) You harvest after the end of the insurance period, your
appraised production will be used to adjust the loss unless you can
prove that no additional causes of loss or deterioration of the crop
occurred after the end of the insurance period; or
(ii) You harvest before the end of the insurance period, your
harvested production will be used to adjust the loss.
(c) If you elect to exclude hail and fire as insured causes of loss
and the insured crop is damaged by hail or fire, appraisals will be made
as described in the applicable Form FCI-78 ``Request To Exclude Hail and
Fire'' or a form containing the same terms approved by the Federal Crop
Insurance Corporation.
(d) The amount of an indemnity that may be determined under the
applicable provisions of your policy may be reduced by an amount,
determined in accordance with the Crop Provisions or Special Provisions,
to reflect out-of-pocket expenses that were not incurred by you as a
result of not planting, caring for, or harvesting the crop. Indemnities
paid for acreage prevented from being planted will be based on a reduced
guarantee as provided for in the policy and will not be further reduced
to reflect expenses not incurred.
(e) With respect to acreage where you have suffered an insurable
loss to planted acreage of your first insured crop in the crop year,
except in the case of double cropping described in section 15(h):
(1) You may elect to not plant or to plant and not insure a second
crop on the same acreage for harvest in the same crop year and collect
an indemnity payment that is equal to 100 percent of the insurable loss
for the first insured crop; or
(2) You may elect to plant and insure a second crop on the same
acreage for harvest in the same crop year (you will pay the full premium
and, if there is an insurable loss to the second crop, receive the full
amount of indemnity that may be due for the second crop, regardless of
whether there is a subsequent crop planted on the same acreage) and:
(i) Collect an indemnity payment that is 35 percent of the insurable
loss for the first insured crop;
(ii) Be responsible for premium that is 35 percent of the premium
that you would otherwise owe for the first insured crop; and
(iii) If the second crop does not suffer an insurable loss:
(A) Collect an indemnity payment for the other 65 percent of
insurable loss that was not previously paid under section 15(e)(2)(i);
and
(B) Be responsible for the remainder of the premium for the first
insured crop that you did not pay under section 15(e)(2)(ii).
(f) With respect to acreage where you were prevented from planting
the first insured crop in the crop year, except in the case of double
cropping described in section 15(h):
(1) If a second crop is not planted on the same acreage for harvest
in the same crop year, you may collect a prevented planting payment that
is equal to 100 percent of the prevented planting payment for the
acreage for the first insured crop; or
(2) If a second crop is planted on the same acreage for harvest in
the same crop year (you will pay the full premium and, if there is an
insurable loss to the second crop, receive the full amount of indemnity
that may be due for the second crop, regardless of whether there is a
subsequent crop planted on the same acreage) and:
(i) Provided the second crop is not planted on or before the final
planting date or during the late planting period (as applicable) for the
first insured crop, you may collect a prevented planting payment that is
35 percent of the prevented planting payment for the first insured crop;
and
(ii) Be responsible for premium that is 35 percent of the premium
that you would otherwise owe for the first insured crop.
(g) The reduction in the amount of indemnity or prevented planting
payment and premium specified in sections 15(e) and 15(f), as
applicable, will apply:
(1) Notwithstanding the priority contained in the Agreement to
Insure section, which states that the Crop Provisions have priority over
the Basic Provisions when a conflict exists, to any premium owed or
indemnity or prevented planting payment made in accordance with the Crop
Provisions, and any applicable endorsement.
(2) Even if another person plants the second crop on any acreage
where the first insured crop was planted or was prevented from being
planted, as applicable.
(3) For prevented planting only:
(i) If a volunteer crop or cover crop is hayed or grazed from the
same acreage, after the late planting period (or after the final
planting date if a late planting period is not applicable) for the first
insured crop in the same crop year, or is otherwise harvested anytime
after the late planting period (or after the final planting date if a
late planting period is not applicable); or
(ii) If you receive cash rent for any acreage on which you were
prevented from planting.
(h) You may receive a full indemnity, or a full prevented planting
payment for a first insured crop when a second crop is planted on the
same acreage in the same crop year, regardless of whether or not the
second crop is insured or sustains an insurable loss, if each of the
following conditions are met:
(1) It is a practice that is generally recognized by agricultural
experts or the organic agricultural industry for the area to plant two
or more crops for harvest in the same crop year;
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(2) The second or more crops are customarily planted after the first
insured crop for harvest on the same acreage in the same crop year in
the area;
(3) Additional coverage insurance offered under the authority of the
Act is available in the county on the two or more crops that are double
cropped;
(4) You provide records acceptable to us of acreage and production
that show you have double cropped acreage in at least two of the last
four crop years in which the first insured crop was planted, or that
show the applicable acreage was double cropped in at least two of the
last four crop years in which the first insured crop was grown on it;
and
(5) In the case of prevented planting, the second crop is not
planted on or prior to the final planting date or, if applicable, prior
to the end of the late planting period for the first insured crop.
(i) The receipt of a full indemnity or prevented planting payment on
both crops that are double cropped is limited to the number of acres for
which you can demonstrate you have double cropped or that have been
historically double cropped as specified in section 15(h).
(j) If any Federal or State agency requires destruction of any
insured crop or crop production, as applicable, because it contains
levels of a substance, or has a condition, that is injurious to human or
animal health in excess of the maximum amounts allowed by the Food and
Drug Administration, other public health organizations of the United
States or an agency of the applicable State, you must destroy the
insured crop or crop production, as applicable, and certify that such
insured crop or crop production has been destroyed prior to receiving an
indemnity payment. Failure to destroy the insured crop or crop
production, as applicable, will result in you having to repay any
indemnity paid and you may be subject to administrative sanctions in
accordance with section 515(h) of the Act and 7 CFR part 400, subpart R,
and any applicable civil or criminal sanctions.
16. Late Planting
Unless limited by the Crop Provisions, insurance will be provided
for acreage planted to the insured crop after the final planting date in
accordance with the following:
(a) The production guarantee or amount of insurance for each acre
planted to the insured crop during the late planting period will be
reduced by 1 percent per day for each day planted after the final
planting date.
(b) Acreage planted after the late planting period (or after the
final planting date for crops that do not have a late planting period)
may be insured as follows:
(1) The production guarantee or amount of insurance for each acre
planted as specified in this subsection will be determined by
multiplying the production guarantee or amount of insurance that is
provided for acreage of the insured crop that is timely planted by the
prevented planting coverage level percentage you elected, or that is
contained in the Crop Provisions if you did not elect a prevented
planting coverage level percentage;
(2) Planting on such acreage must have been prevented by the final
planting date (or during the late planting period, if applicable) by an
insurable cause occurring within the insurance period for prevented
planting coverage; and
(3) All production from insured acreage as specified in this section
will be included as production to count for the unit.
(c) The premium amount for insurable acreage specified in this
section will be the same as that for timely planted acreage. If the
amount of premium you are required to pay (gross premium less our
subsidy) for such acreage exceeds the liability, coverage for those
acres will not be provided (no premium will be due and no indemnity will
be paid).
(d) Any acreage on which an insured cause of loss is a material
factor in preventing completion of planting, as specified in the
definition of ``planted acreage'' (e.g., seed is broadcast on the soil
surface but cannot be incorporated) will be considered as acreage
planted after the final planting date and the production guarantee will
be calculated in accordance with section 16(b)(1).
17. Prevented Planting
(a) Unless limited by the policy provisions, a prevented planting
payment may be made to you for eligible acreage if:
(1) You were prevented from planting the insured crop (Failure to
plant when other producers in the area were planting will result in the
denial of the prevented planting claim) by an insured cause that occurs:
(i) On or after the sales closing date contained in the Special
Provisions for the insured crop in the county for the crop year the
application for insurance is accepted; or
(ii) For any subsequent crop year, on or after the sales closing
date for the previous crop year for the insured crop in the county,
provided insurance has been in force continuously since that date.
Cancellation for the purpose of transferring the policy to a different
insurance provider for the subsequent crop year will not be considered a
break in continuity for the purpose of the preceding sentence;
(2) You include any acreage of the insured crop that was prevented
from being planted on your acreage report; and
(3) You did not plant the insured crop during or after the late
planting period. If such acreage was planted to the insured crop during
or after the late planting period, it is covered under the late planting
provisions.
[[Page 119]]
(b) The actuarial documents may contain additional levels of
prevented planting coverage that you may purchase for the insured crop:
(1) Such purchase must be made on or before the sales closing date.
(2) If you do not purchase one of those additional levels by the
sales closing date, you will receive the prevented planting coverage
specified in the Crop Provisions.
(3) If you have a Catastrophic Risk Protection Endorsement for any
crop, the additional levels of prevented planting coverage will not be
available for that crop.
(4) You may not increase your elected or assigned prevented planting
coverage level for any crop year if a cause of loss that will or could
prevent planting is evident prior to the time you wish to change your
prevented planting coverage level.
(c) The premium amount for acreage that is prevented from being
planted will be the same as that for timely planted acreage except as
specified in section 15(f). If the amount of premium you are required to
pay (gross premium less our subsidy) for acreage that is prevented from
being planted exceeds the liability on such acreage, coverage for those
acres will not be provided (no premium will be due and no indemnity will
be paid for such acreage).
(d) Drought or failure of the irrigation water supply will be
considered to be an insurable cause of loss for the purposes of
prevented planting only if on the final planting date (or within the
late planting period if you elect to try to plant the crop):
(1) For non-irrigated acreage, the area that is prevented from being
planted has insufficient soil moisture for germination of seed or
progress toward crop maturity due to a prolonged period of dry weather.
Prolonged precipitation deficiencies must be verifiable using
information collected by sources whose business it is to record and
study the weather, including, but not limited to, local weather
reporting stations of the National Weather Service; or
(2) For irrigated acreage, there is not a reasonable expectation of
having adequate water to carry out an irrigated practice. If you knew or
had reason to know that your water is reduced before the final planting
date, no reasonable expectation existed.
(e) The maximum number of acres that may be eligible for a prevented
planting payment for any crop will be determined as follows:
(1) The total number of acres eligible for prevented planting
coverage for all crops cannot exceed the number of acres of cropland in
your farming operation for the crop year, unless you are eligible for
prevented planting coverage on double cropped acreage in accordance with
section 17(f) (4). The eligible acres for each insured crop will be
determined in accordance with the following table.
------------------------------------------------------------------------
Eligible acres if,
Eligible acres if, in any of the 4 most
in any of the 4 most recent crop years,
recent crop years, you have not planted
you have planted any any crop in the
crop in the county county for which
Type of crop for which prevented prevented planting
planting insurance insurance was
was available or available or have
have received a not received a
prevented planting prevented planting
insurance guarantee insurance guarantee
------------------------------------------------------------------------
(i) The crop is not required (A) The maximum (B) The number of
to be contracted with a number of acres acres specified on
processor to be insured. certified for APH your intended
purposes, or acreage report
insured acres which is submitted
reported, for the to us by the sales
crop in any one of closing date for
the 4 most recent all crops you
crop years (not insure for the crop
including reported year and that is
prevented planting accepted by us. The
acreage that was total number of
planted to a second acres listed may
crop unless you not exceed the
meet the double number of acres of
cropping cropland in your
requirements in farming operation
section 17(f)(4)). at the time you
The number of acres submit the intended
determined above acreage report. The
for a crop may be number of acres
increased by determined above
multiplying it by for a crop may only
the ratio of the be increased by
total cropland multiplying it by
acres that you are the ratio of the
farming this year total cropland
(if greater) to the acres that you are
total cropland farming this year
acres that you (if greater) to the
farmed in the number of acres
previous year, listed on your
provided that you intended acreage
submit proof to us report, if you meet
that for the the conditions
current crop year stated in section
you have purchased 17(e)(1)(i)(A).
or leased
additional land or
that acreage will
be released from
any USDA program
which prohibits
harvest of a crop.
Such acreage must
have been
purchased, leased,
or released from
the USDA program,
in time to plant it
for the current
crop year using
good farming
practices. No cause
of loss that would
prevent planting
may be evident at
the time you lease
the acreage (except
acreage you leased
the previous year
and continue to
lease in the
current crop year);
you buy the
acreage; the
acreage is released
from a USDA program
which prohibits
harvest of a crop;
you request a
written agreement
to insure the
acreage; or you
otherwise acquire
the acreage (such
as inherited or
gifted acreage)..
[[Page 120]]
(ii) The crop must be (A) The number of (B) The number of
contracted with a processor acres of the crop acres of the crop
to be insured. specified in the as determined in
processor contract, section
if the contract 17(e)(1)(ii)(A).
specifies a number
of acres contracted
for the crop year;
or the result of
dividing the
quantity of
production stated
in the processor
contract by your
approved yield, if
the processor
contract specifies
a quantity of
production that
will be accepted.
If a minimum number
of acres or amount
of production is
specified in the
processor contract,
this amount will be
used to determine
the eligible acres.
If a processor
cancels or does not
provide contracts,
or reduces the
contracted acreage
or production from
what would have
otherwise been
allowed, solely
because the acreage
was prevented from
being planted due
to an insured cause
of loss, we may
elect to determine
the number of acres
eligible based on
the number of acres
or amount of
production you had
contracted in the
county in the
previous crop year.
If you did not have
a processor
contract in place
for the previous
crop year, you will
not have any
eligible prevented
planting acreage
for the applicable
processor crop. The
total eligible
prevented planting
acres in all
counties cannot
exceed the total
number of acres or
amount of
production
contracted in all
counties in the
previous crop year.
If the applicable
crop provisions
require that the
price election be
based on a contract
price, and a
contract is not in
force for the
current year, the
price election may
be based on the
contract price in
place for the
previous crop year..
------------------------------------------------------------------------
(2) Any eligible acreage determined in accordance with the table
contained in section 17(e)(1) will be reduced by subtracting the number
of acres of the crop (insured and uninsured) that are timely and late
planted, including acreage specified in section 16(b).
(f) Regardless of the number of eligible acres determined in section
17(e), prevented planting coverage will not be provided for any acreage:
(1) That does not constitute at least 20 acres or 20 percent of the
insurable crop acreage in the unit, whichever is less, and any prevented
planting acreage within a field that contains planted acreage will be
considered to be acreage of the same crop, type, and practice that is
planted in the field except that the prevented planting acreage may be
considered to be acreage of a crop, type, and practice other than that
which is planted in the field if:
(i) The acreage that was prevented from being planted constitutes at
least 20 acres or 20 percent of the total insurable acreage in the field
and you produced both crops, crop types, or followed both practices in
the same field in the same crop year within any one of the four most
recent crop years;
(ii) You were prevented from planting a first insured crop and you
planted a second crop in the field (There can only be one first insured
crop in a field unless the requirements in section 17(f)(1)(i) or (iii)
are met); or
(iii) The insured crop planted in the field would not have been
planted on the remaining prevented planting acreage (For example, where
rotation requirements would not be met or you already planted the total
number of acres specified in the processor contract);
(2) For which the actuarial documents do not provide the information
needed to determine a premium rate unless a written agreement designates
such premium rate;
(3) Used for conservation purposes, intended to be left unplanted
under any program administered by the USDA or other government agency,
or required to be left unharvested under the terms of the lease or any
other agreement (The number of acres eligible for prevented planting
will be limited to the number of acres specified in the lease for which
you are required to pay either cash or share rent);
(4) On which the insured crop is prevented from being planted, if
you or any other person receives a prevented planting payment for any
crop for the same acreage in the same crop year (It is your
responsibility to
[[Page 121]]
determine whether a prevented planting payment had previously been made
for the crop year on the acreage for which you are now claiming a
prevented planting payment and report such information to us before any
prevented planting payment can be made), excluding share arrangements,
unless:
(5) On which the insured crop is prevented from being planted, if:
(i) Any crop is planted within or prior to the late planting period
or on or prior to the final planting date if no late planting period is
applicable, unless:
(A) You meet the double cropping requirements in section 17(f)(4);
(B) The crop planted was a cover crop; or
(C) No benefit, including any benefit under any USDA program, was
derived from the crop; or
(ii) Any volunteer or cover crop is hayed, grazed or otherwise
harvested within or prior to the late planting period or on or prior to
the final planting date if no late planting period is applicable;
(6) For which planting history or conservation plans indicate that
the acreage would remain fallow for crop rotation purposes or on which
any pasture or other forage crop is in place on the acreage during the
time that planting of the insured crop generally occurs in the area;
(7) That exceeds the number of acres eligible for a prevented
planting payment;
(8) That exceeds the number of eligible acres physically available
for planting;
(9) For which you cannot provide proof that you had the inputs
available to plant and produce a crop with the expectation of at least
producing the yield used to determine the production guarantee or amount
of insurance (Evidence that you have previously planted the crop on the
unit will be considered adequate proof unless your planting practices or
rotational requirements show that the acreage would have remained fallow
or been planted to another crop);
(10) Based on an irrigated practice production guarantee or amount
of insurance unless adequate irrigation facilities were in place to
carry out an irrigated practice on the acreage prior to the insured
cause of loss that prevented you from planting. Acreage with an
irrigated practice production guarantee will be limited to the number of
acres allowed for that practice under sections 17(e) and (f);
(11) Based on a crop type that you did not plant, or did not receive
a prevented planting insurance guarantee for, in at least one of the
four most recent crop years. Types for which separate price elections,
amounts of insurance, or production guarantees are available must be
included in your APH database in at least one of the four most recent
crop years, or crops that do not require yield certification (crops for
which the insurance guarantee is not based on APH) must be reported on
your acreage report in at least one of the four most recent crop years
except as allowed in section 17(e)(1)(i)(B). We will limit prevented
planting payments based on a specific crop type to the number of acres
allowed for that crop type as specified in sections 17(e) and (f); or
(12) If a cause of loss has occurred that would prevent planting at
the time:
(i) You lease the acreage (except acreage you leased the previous
crop year and continue to lease in the current crop year);
(ii) You buy the acreage;
(iii) The acreage is released from a USDA program which prohibits
harvest of a crop;
(iv) You request a written agreement to insure the acreage; or
(v) You acquire the acreage through means other than lease or
purchase (such as inherited or gifted acreage).
(g) If you purchased an additional coverage policy for a crop, and
you executed a High Risk Land Exclusion Option that separately insures
acreage which has been designated as ``high-risk'' land by FCIC under a
Catastrophic Risk Protection Endorsement for that crop, the maximum
number of acres eligible for a prevented planting payment will be
limited for each policy as specified in sections 17(e) and (f).
(h) If you are prevented from planting a crop for which you do not
have an adequate base of eligible prevented planting acreage, as
determined in accordance with section 17(e)(1), your prevented planting
production guarantee or amount of insurance, premium, and prevented
planting payment will be based on the crops insured for the current crop
year, for which you have remaining eligible prevented planting acreage.
The crops used for this purpose will be those that result in a prevented
planting payment most similar to the prevented planting payment that
would have been made for the crop that was prevented from being planted.
(1) For example, assume you were prevented from planting 200 acres
of corn and have 100 acres eligible for a corn prevented planting
guarantee that would result in a payment of $40 per acre. You also had
50 acres of potato eligibility that would result in a $100 per acre
payment, 90 acres of grain sorghum eligibility that would result in a
$30 per acre payment, and 100 acres of soybean eligibility that would
result in a $25 per acre payment. Your prevented planting coverage for
the 200 acres would be based on 100 acres of corn ($40 per acre), 90
acres of grain sorghum ($30 per acre), and 10 acres of soybeans ($25 per
acre).
(2) Prevented planting coverage will be allowed as specified in this
section (17(h)) only if the crop that was prevented from being planted
meets all policy provisions, except for having an adequate base of
eligible prevented planting acreage. Payment may be made based on crops
other than those that
[[Page 122]]
were prevented from being planted even though other policy provisions,
including but not limited to, processor contract and rotation
requirements, have not been met for the crop on which payment is being
based. However, if you were prevented from planting any non-irrigated
crop acreage and you do not have any remaining eligible acreage for that
crop and you do not have any other crop remaining with eligible acres
under a non-irrigated practice, no prevented planting payment will be
made for the acreage.
(i) The prevented planting payment for any eligible acreage within a
unit will be determined by:
(1) Multiplying the liability per acre for timely planted acreage of
the insured crop (the amount of insurance per acre or the production
guarantee per acre multiplied by the price election for the crop, or
type if applicable) by the prevented planting coverage level percentage
you elected, or that is contained in the Crop Provisions if you did not
elect a prevented planting coverage level percentage;
(2) Multiplying the result of section 17(i)(1) by the number of
eligible prevented planting acres in the unit; and
(3) Multiplying the result of section 17(i)(2) by your share.
18. Written Agreements
Terms of this policy which are specifically designated for the use
of written agreements may be altered by written agreement in accordance
with the following:
(a) You must apply in writing for each written agreement no later
than the sales closing date, except as provided in section 18(e);
(b) The application for a written agreement must contain all
variable terms of the contract between you and us that will be in effect
if the written agreement is not approved;
(c) If approved by FCIC, the written agreement will include all
variable terms of the contract, including, but not limited to, crop
practice, type or variety, the guarantee (except for a written agreement
in effect for more than one year) and premium rate or information needed
to determine the guarantee and premium rate, and price election (Price
elections will not exceed the price election contained in the Special
Provisions, or an addendum thereto, for the county that is used to
establish the other terms of the written agreement. If no price election
can be provided, the written agreement will not be approved by FCIC);
(d) Each written agreement will only be valid for the number of crop
years specified in the written agreement, and a multi-year written
agreement:
(1) Will only apply for any particular crop year designated in the
written agreement if all terms and conditions in the written agreement
are still applicable for the crop year and the conditions under which
the written agreement has been provided have not changed prior to the
beginning of the insurance period (If conditions change during or prior
to the crop year, the written agreement will not be effective for that
crop year but may still be effective for a subsequent crop year if
conditions under which the written agreement has been provided exist for
such year);
(2) May be canceled in writing by:
(i) FCIC not less than 30 days before the cancellation date if it
discovers that any term or condition of the written agreement, including
the premium rate, is not appropriate for the crop; or
(ii) You or us on or before the cancellation date;
(3) That is not renewed in writing after it expires, is not
applicable for a crop year, or is canceled, then insurance coverage will
be in accordance with the terms and conditions stated in this policy,
without regard to the written agreement; and
(4) Will be automatically cancelled if you transfer your policy to
another insurance provider (No notice will be provided to you and for
any subsequent crop year, for a written agreement to be effective, you
must timely request renewal of the written agreement in accordance with
this section);
(e) A request for a written agreement may be submitted:
(1) After the sales closing date, but on or before the acreage
reporting date, if you demonstrate your physical inability to submit the
request prior to the sales closing date (For example, you have been
hospitalized or a blizzard has made it impossible to submit the written
agreement request in person or by mail);
(2) For the first year the written agreement will be in effect only:
(i) On or before the acreage reporting date, to:
(A) Insure unrated land, or an unrated practice, type or variety of
a crop (Such written agreements may be approved only after inspection of
the acreage by us and the written agreement may only be approved by FCIC
if the crop's potential is equal to or exceeds 90 percent of the yield
used to determine the production guarantee or the amount of insurance
and you sign the agreement on the same day the appraisal is made); or
(B) Establish optional units in accordance with FCIC procedures that
otherwise would not be allowed, change the premium rate or transitional
yield for designated high risk land, change a tobacco classification, or
insure acreage that is greater than five percent of the planted acreage
in the unit where the acreage has not been planted and harvested or
insured in any of the three previous crop years; or
[[Page 123]]
(ii) On or before the cancellation date, to insure a crop in a
county that does not have actuarial documents for the crop (If the Crop
Provisions do not provide a cancellation date for the county, the
cancellation date for other insurable crops in the same state that have
similar final planting and harvesting dates will be applicable); or
(iii) On or before the date specified in the Crop Provisions or
Special Provisions;
(3) On or before the sales closing date, for all requests for
renewal of written agreements, except as provided in section 18(e)(1);
(4) To add land or a crop to an existing written agreement or to add
land or a crop to a request for a written agreement provided the request
is submitted by the deadlines specified in this subsection;
(f) A request for a written agreement must contain:
(1) For all written agreement requests:
(i) A completed ``Request for Actuarial Change'' form;
(ii) An APH form (except for policies that do not require APH)
containing all the information needed to determine the approved yield
for the current crop year (completed APH form), signed by you, or an
unsigned, completed APH form with the applicable production reports
signed and dated by you that are based on verifiable records of actual
yields for the crop and county for which the written agreement is being
requested (the actual yields do not necessarily have to be from the same
physical acreage for which you are requesting a written agreement) for
at least the most recent crop year during the base period and verifiable
records of actual yields if required by FCIC;
(iii) Evidence from agricultural experts or the organic agricultural
industry, as applicable, that the crop can be produced in the area if
the request is to provide insurance for practices, types, or varieties
that are not insurable, unless we are notified in writing by FCIC that
such evidence is not required by FCIC;
(iv) The legal description of the land (in areas where legal
descriptions are available), FSA Farm Serial Number including tract
number, and a FSA aerial photograph, acceptable Geographic Information
System or Global Positioning System maps, or other legible maps
delineating field boundaries where you intend to plant the crop for
which insurance is requested;
(v) For any perennial crop, an inspection report completed by us;
and
(vi) All other information that supports your request for a written
agreement (including but not limited to records pertaining to levees,
drainage systems, flood frequency data, soil types, elevation, etc.);
(2) For written agreement requests for counties without actuarial
documents for the crop, the requirements in section 18(f)(1) (except
section 18(f)(1)(ii)) and:
(i) A completed APH form (except for policies that do not require
APH) based on verifiable records of actual yields for the crop and
county for which the written agreement is being requested (the actual
yields do not necessarily have to be from the same physical acreage for
which you are requesting a written agreement) for at least the most
recent three consecutive crop years during the base period;
(ii) Acceptable production records for at least the most recent
three consecutive crop years;
(iii) The dates you and other growers in the area normally plant and
harvest the crop, if applicable;
(iv) The name, location of, and approximate distance to the place
the crop will be sold or used by you;
(v) For any irrigated practice, the water source, method of
irrigation, and the amount of water needed for an irrigated practice for
the crop; and
(vi) All other information that supports your request for a written
agreement (such as publications regarding yields, practices, risks,
climatic data, etc.); and
(3) Such other information as specified in the Special Provisions or
required by FCIC;
(g) A request for a written agreement will not be accepted if:
(1) The request is submitted to us after the deadline contained in
sections 18(a) or (e);
(2) All the information required in section 18(f) is not submitted
to us with the request for a written agreement (The request for a
written agreement may be accepted if any missing information is
available from other acceptable sources); or
(3) The request is to add land to an existing written agreement or
to add land to a request for a written agreement and the request to add
the land is not submitted by the deadlines specified in sections (a) or
(e);
(h) A request for a written agreement will be denied if:
(1) FCIC determines the risk is excessive;
(2) Your APH history demonstrates you have not produced at least 50
percent of the transitional yield for the crop, type, and practice
obtained from a county with similar agronomic conditions and risk
exposure;
(3) There is not adequate information available to establish an
actuarially sound premium rate and insurance coverage for the crop and
acreage;
(4) The crop was not previously grown in the county or there is no
evidence of a market for the crop based on sales receipts,
contemporaneous feeding records or a contract for the crop (applicable
only for counties without actuarial documents); or
(5) Agricultural experts or the organic agricultural industry
determines the crop is not adapted to the county;
(i) A written agreement will be denied unless:
[[Page 124]]
(1) FCIC approves the written agreement;
(2) The original written agreement is signed by you and sent to us
not later than the expiration date; and
(3) The crop meets the minimum appraisal amount specified in section
18(e)(2)(i)(A), if applicable;
(j) Multiyear written agreements may be canceled and requests for
renewal may be rejected if the severity or frequency of your loss
experience under the written agreement is significantly worse than
expected based on the information provided by you or used to establish
your premium rate and the loss experience of other crops with similar
risks in the area;
(k) With respect to your and our ability to reject an offer for a
written agreement:
(1) When a single Request for Actuarial Change form is submitted,
regardless of how many requests for changes are contained on the form,
you and we can only accept or reject the written agreement in its
entirety (you cannot reject specific terms of the written agreement and
accept others);
(2) When multiple Request for Actuarial Change forms are submitted,
regardless of when the forms are submitted, for the same condition or
for the same crop (i.e., to insure corn on ten legal descriptions where
there are no actuarial documents in the county or the request is to
change the premium rates from the high risk rates) all these forms may
be treated as one request and you and we will only have the option of
accepting or rejecting the written agreement in its entirety (you cannot
reject specific terms of the written agreement and accept others);
(3) When multiple Request for Actuarial Change forms are submitted,
regardless of when the forms are submitted, for the different conditions
or for different crops, separate agreements may be issued and you and we
will have the option to accept or reject each written agreement; and
(4) If we reject an offer for a written agreement approved by FCIC,
you may seek arbitration or mediation of our decision to reject the
offer in accordance with section 20;
(l) Any information that is submitted by you after the applicable
deadlines in sections 18(a) and (e) will not be considered, unless such
information is specifically requested in accordance with section
18(f)(3);
(m) If the written agreement or the policy is canceled for any
reason, or the period for which an existing written agreement is in
effect ends, a request for renewal of the written agreement must contain
all the information required by this section and be submitted in
accordance with section 18(e), unless otherwise specified by FCIC; and
(n) If a request for a written agreement is not approved by FCIC, a
request for a written agreement for any subsequent crop year that fails
to address the stated basis for the denial will not be accepted (If the
request for a written agreement contains the same information that was
previously rejected or denied, you will not have any right to arbitrate,
mediate or appeal the non-acceptance of your request).
19. Crops as Payment
You must not abandon any crop to us. We will not accept any crop as
compensation for payments due us.
[For FCIC Policies]
20. Appeal, Reconsideration, Administrative and Judicial Review.
(a) All determinations required by the policy will be made by us.
(b) If you disagree with our determinations, you may:
(1) Except for determinations specified in section 20(b)(2), obtain
an administrative review in accordance with 7 CFR part 400, subpart J
(administrative review) or appeal in accordance with 7 CFR part 11
(appeal); or
(2) For determinations regarding whether you have used good farming
practices (excluding determinations of the amount of assigned production
for uninsured causes for your failure to use good farming practices),
request reconsideration in accordance with the reconsideration process
established for this purpose and published at 7 CFR part 400, subpart J
(reconsideration). To appeal or request administrative review of
determinations of the amount of assigned production, you must use the
appeal or administrative review process.
(c) If you fail to exhaust your right to appeal or for
reconsideration, as applicable, you will not be able to resolve the
dispute through judicial review.
(d) If reconsideration or appeal has been initiated within the time
frames specified in those sections and judicial review is sought, any
suit against us must be:
(1) Filed not later than one year after the date of the decision
rendered in the reconsideration or appeal; and
(2) Brought in the United States district court for the district in
which the insured farm involved in the decision is located.
(e) You may only recover contractual damages from us. Under no
circumstances can you recover any attorney fees or other expenses, or
any punitive, compensatory or any other damages from us in
administrative review, appeal, reconsideration or litigation.
[For Reinsured Policies]
20. Mediation, Arbitration, Appeal, Reconsideration, and Administrative
and Judicial Review.
(a) If you and we fail to agree on any determination made by us
except those specified in section 20(d), the disagreement may be
resolved through mediation in accordance with
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section 20(g). If resolution cannot be reached through mediation, or you
and we do not agree to mediation, the disagreement must be resolved
through arbitration in accordance with the rules of the American
Arbitration Association (AAA), except as provided in sections 20(c) and
(f), and unless rules are established by FCIC for this purpose. Any
mediator or arbitrator with a familial, financial or other business
relationship to you or us, or our agent or loss adjuster, is
disqualified from hearing the dispute.
(1) All disputes involving determinations made by us, except those
specified in section 20(d), are subject to mediation or arbitration.
However, if the dispute in any way involves a policy or procedure
interpretation, regarding whether a specific policy provision or
procedure is applicable to the situation, how it is applicable, or the
meaning of any policy provision or procedure, either you or we must
obtain an interpretation from FCIC in accordance with 7 CFR part 400,
subpart X or such other procedures as established by FCIC.
(i) Any interpretation by FCIC will be binding in any mediation or
arbitration.
(ii) Failure to obtain any required interpretation from FCIC will
result in the nullification of any agreement or award.
(iii) An interpretation by FCIC of a policy provision is considered
a rule of general applicability and is not appealable. If you disagree
with an interpretation of a policy provision by FCIC, you must obtain a
Director's review from the National Appeals Division in accordance with
7 CFR 11.6 before obtaining judicial review in accordance with
subsection (e).
(iv) An interpretation by FCIC of a procedure may be appealed to the
National Appeals Division in accordance with 7 CFR part 11.
(2) Unless the dispute is resolved through mediation, the arbitrator
must provide to you and us a written statement describing the issues in
dispute, the factual findings, the determinations and the amount and
basis for any award and breakdown by claim for any award. The statement
must also include any amounts awarded for interest. Failure of the
arbitrator to provide such written statement will result in the
nullification of all determinations of the arbitrator. All agreements
reached through settlement, including those resulting from mediation,
must be in writing and contain at a minimum a statement of the issues in
dispute and the amount of the settlement.
(b) Regardless of whether mediation is elected:
(1) The initiation of arbitration proceedings must occur within one
year of the date we denied your claim or rendered the determination with
which you disagree, whichever is later;
(2) If you fail to initiate arbitration in accordance with section
20(b)(1) and complete the process, you will not be able to resolve the
dispute through judicial review;
(3) If arbitration has been initiated in accordance with section
20(b)(1) and completed, and judicial review is sought, suit must be
filed not later than one year after the date the arbitration decision
was rendered; and
(4) In any suit, if the dispute in any way involves a policy or
procedure interpretation, regarding whether a specific policy provision
or procedure is applicable to the situation, how it is applicable, or
the meaning of any policy provision or procedure, an interpretation must
be obtained from FCIC in accordance with 7 CFR part 400, subpart X or
such other procedures as established by FCIC. Such interpretation will
be binding.
(c) Any decision rendered in arbitration is binding on you and us
unless judicial review is sought in accordance with section 20(b)(3).
Notwithstanding any provision in the rules of the AAA, you and we have
the right to judicial review of any decision rendered in arbitration.
(d) If you do not agree with any determination made by us or FCIC
regarding whether you have used a good farming practice (excluding
determinations by us of the amount of assigned production for uninsured
causes for your failure to use good farming practices), you may request
reconsideration by FCIC of this determination in accordance with the
reconsideration process established for this purpose and published at 7
CFR part 400, subpart J (reconsideration). To resolve disputes regarding
determinations of the amount of assigned production, you must use the
arbitration or mediation process contained in this section.
(1) You must complete reconsideration before filing suit against
FCIC and any such suit must be brought in the United States district
court for the district in which the insured farm is located.
(2) Suit must be filed not later than one year after the date of the
decision rendered in the reconsideration.
(3) You cannot sue us for determinations of whether good farming
practices were used by you.
(e) Except as provided in section 20(d), if you disagree with any
other determination made by FCIC, you may obtain an administrative
review in accordance with 7 CFR part 400, subpart J (administrative
review) or appeal in accordance with 7 CFR part 11 (appeal). If you
elect to bring suit after completion of any appeal, such suit must be
filed against FCIC not later than one year after the date of the
decision rendered in such appeal. Under no circumstances can you recover
any attorney fees or other expenses, or any punitive, compensatory or
any other damages from FCIC.
[[Page 126]]
(f) In any mediation, arbitration, appeal, administrative review,
reconsideration or judicial process, the terms of this policy, the Act,
and the regulations published at 7 CFR chapter IV, including the
provisions of 7 CFR part 400, subpart P, are binding. Conflicts between
this policy and any state or local laws will be resolved in accordance
with section 31. If there are conflicts between any rules of the AAA and
the provisions of your policy, the provisions of your policy will
control.
(g) To resolve any dispute through mediation, you and we must both:
(1) Agree to mediate the dispute;
(2) Agree on a mediator; and
(3) Be present, or have a designated representative who has
authority to settle the case present, at the mediation.
(h) Except as provided in section 20(i), no award or settlement in
mediation, arbitration, appeal, administrative review or reconsideration
process or judicial review can exceed the amount of liability
established or which should have been established under the policy,
except for interest awarded in accordance with section 26.
(i) In a judicial review only, you may recover attorneys fees or
other expenses, or any punitive, compensatory or any other damages from
us only if you obtain a determination from FCIC that we, our agent or
loss adjuster failed to comply with the terms of this policy or
procedures issued by FCIC and such failure resulted in you receiving a
payment in an amount that is less than the amount to which you were
entitled. Requests for such a determination should be addressed to the
following: USDA/RMA/Deputy Administrator of Compliance/Stop 0806, 1400
Independence Avenue, SW., Washington, DC 20250-0806.
(j) If FCIC elects to participate in the adjustment of your claim,
or modifies, revises or corrects your claim, prior to payment, you may
not bring an arbitration, mediation or litigation action against us. You
must request administrative review or appeal in accordance with section
20(e).
21. Access to Insured Crop and Records, and Record Retention.
(a) We, and any employee of USDA authorized to investigate or review
any matter relating to crop insurance, have the right to examine the
insured crop and all records related to the insured crop and any
mediation, arbitration or litigation involving the insured crop as often
as reasonably required during the record retention period.
(b) You must retain, and provide upon our request, or the request of
any employee of USDA authorized to investigate or review any matter
relating to crop insurance:
(1) Complete records of the planting, replanting, inputs,
production, harvesting, and disposition of the insured crop on each unit
for three years after the end of the crop year (This requirement also
applies to all such records for acreage that is not insured); and
(2) All records used to establish the amount of production you
certified on your production reports used to compute your approved yield
for three years after the end of the crop year for which you initially
certified such records, unless such records have already been provided
to us (For example, if your approved yield for the 2003 crop year was
based on production records you certified for the 1997 through 2002 crop
years, you must retain all such records through the 2006 crop year,
unless such records have already been provided to us).
(c) We, or any employee of USDA authorized to investigate or review
any matter relating to crop insurance, may extend the record retention
period beyond three years by notifying you of such extension in writing.
(d) By signing the application for insurance authorized under the
Act or by continuing insurance for which you have previously applied,
you authorize us or USDA, or any person acting for us or USDA authorized
to investigate or review any matter relating to crop insurance, to
obtain records relating to the planting, replanting, inputs, production,
harvesting, and disposition of the insured crop from any person who may
have custody of such records, including but not limited to, FSA offices,
banks, warehouses, gins, cooperatives, marketing associations, and
accountants. You must assist in obtaining all records we or any employee
of USDA authorized to investigate or review any matter relating to crop
insurance request from third parties.
(e) Failure to provide access to the insured crop or the farm,
authorize access to the records maintained by third parties or assist in
obtaining such records will result in a determination that no indemnity
is due for the crop year in which such failure occurred.
(f) Failure to maintain or provide records will result in:
(1) The imposition of an assigned yield in accordance with section
3(e)(1) and 7 CFR part 400, subpart G for those crop years for which you
do not have the required production records to support a certified
yield;
(2) A determination that no indemnity is due if you fail to provide
records necessary to determine your loss;
(3) Combination of the optional units into the applicable basic
unit;
(4) Assignment of production to the units by us if you fail to
maintain separate records:
(i) For your basic units; or
(ii) For any uninsurable acreage; and
(5) The imposition of consequences specified in section 6(g), as
applicable.
(g) If the imposition of an assigned yield under section 21(f)(1)
would affect an indemnity, prevented planting payment or replant
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payment that was paid in a prior crop year, such claim will be adjusted
and you will be required to repay any overpaid amounts.
22. Other Insurance
(a) Other Like Insurance--Nothing in this section prevents you from
obtaining other insurance not authorized under the Act. However, unless
specifically required by policy provisions, you must not obtain any
other crop insurance authorized under the Act on your share of the
insured crop. If you cannot demonstrate that you did not intend to have
more than one policy in effect, you may be subject to the consequences
authorized under this policy, the Act, or any other applicable statute.
If you can demonstrate that you did not intend to have more than one
policy in effect (For example, an application to transfer your policy or
written notification to an insurance provider that states you want to
purchase, or transfer, insurance and you want any other policies for the
crop canceled would demonstrate you did not intend to have duplicate
policies), and:
(1) One is an additional coverage policy and the other is a
Catastrophic Risk Protection policy:
(i) The additional coverage policy will apply if both policies are
with the same insurance provider or, if not, both insurance providers
agree; or
(ii) The policy with the earliest date of application will be in
force if both insurance providers do not agree; or
(2) Both are additional coverage policies or both are Catastrophic
Risk Protection policies, the policy with the earliest date of
application will be in force and the other policy will be void, unless
both policies are with:
(i) The same insurance provider and the insurance provider agrees
otherwise; or
(ii) Different insurance providers and both insurance providers
agree otherwise.
(b) Other Insurance Against Fire. If you have other insurance,
whether valid or not, against damage to the insured crop by fire during
the insurance period, and you have not excluded coverage for fire from
this policy, we will be liable for loss due to fire caused by a
naturally occurring event only for the smaller of:
(1) The amount of indemnity determined pursuant to this policy
without regard to such other insurance; or
(2) The amount by which the loss from fire is determined to exceed
the indemnity paid or payable under such other insurance.
(c) For the purpose of subsection (b) of this section the amount of
loss from fire will be the difference between the fair market value of
the production of the insured crop on the unit involved before the fire
and after the fire, as determined from appraisals made by us.
23. Conformity to Food Security Act
Although your violation of a number of federal statutes, including
the Act, may cause cancellation, termination, or voidance of your
insurance contract, you should be specifically aware that your policy
will be canceled if you are determined to be ineligible to receive
benefits under the Act due to violation of the controlled substance
provisions (title XVII) of the Food Security Act of 1985 (Pub. L. 99-
198) and the regulations promulgated under the Act by USDA. Your
insurance policy will be canceled if you are determined, by the
appropriate Agency, to be in violation of these provisions. We will
recover any and all monies paid to you or received by you during your
period of ineligibility, and your premium will be refunded, less a
reasonable amount for expenses and handling not to exceed 20 percent of
the premium paid or to be paid by you.
For FCIC policies
24. Amounts Due Us
(a) Any amount illegally or erroneously paid to you or that is owed
to us but is delinquent may be recovered by us through offset by
deducting it from any loan or payment due you under any Act of Congress
or program administered by any United States Government Agency, or by
other collection action.
(b) Interest will accrue at the rate of 1.25 percent simple interest
per calendar month, or any part thereof, on any unpaid premium amount or
administrative fee due us. With respect to any premiums or
administrative fees owed, interest will start to accrue on the first day
of the month following the premium billing date specified in the Special
Provisions.
(c) For the purpose of any other amounts due us, such as repayment
of indemnities found not to have been earned:
(1) Interest will start on the date that notice is issued to you for
the collection of the unearned amount;
(2) Amounts found due under this paragraph will not be charged
interest if payment is made within 30 days of issuance of the notice by
us;
(3) The amount will be considered delinquent if not paid within 30
days of the date the notice is issued by us;
(4) Penalties and interest will be charged in accordance with 31
U.S.C. 3717 and 4 CFR part 102; and
(5) The penalty for accounts more than 90 days delinquent is an
additional 6 percent per annum.
(d) Interest on any amount due us found to have been received by you
because of fraud, misrepresentation or presentation by you of
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a false claim will start on the date you received the amount with the
additional 6 percent penalty beginning on the 31st day after the notice
of amount due is issued to you. This interest is in addition to any
other amount found to be due under any other federal criminal or civil
statute.
If we determine that it is necessary to contract with a collection
agency, refer the debt to government collection centers, the Department
of Treasury Offset Program, or to employ an attorney to assist in
collection, you agree to pay all the expenses of collection.
(f) All amounts paid will be applied first to expenses of collection
if any, second to the reduction of any penalties which may have been
assessed, then to reduction of accrued interest, and finally to
reduction of the principal balance.
For reinsured policies
24. Amounts Due Us
(a) Interest will accrue at the rate of 1.25 percent simple interest
per calendar month, or any portion thereof, on any unpaid amount owed to
us or on any unpaid administrative fees owed to FCIC. For the purpose of
premium amounts owed to us or administrative fees owed to FCIC, interest
will start to accrue on the first day of the month following the premium
billing date specified in the Special Provisions. We will collect any
unpaid amounts owed to us and any interest owed thereon and, prior to
the termination date, we will collect any administrative fees and
interest owed thereon to FCIC. After the termination date, FCIC will
collect any unpaid administrative fees and any interest owed thereon.
(b) For the purpose of any other amounts due us, such as repayment
of indemnities found not to have been earned, interest will start to
accrue on the date that notice is issued to you for the collection of
the unearned amount. Amounts found due under this paragraph will not be
charged interest if payment is made within 30 days of issuance of the
notice by us. The amount will be considered delinquent if not paid
within 30 days of the date the notice is issued by us.
(c) All amounts paid will be applied first to expenses of collection
(see subsection (d) of this section) if any, second to the reduction of
accrued interest, and then to the reduction of the principal balance.
(d) If we determine that it is necessary to contract with a
collection agency or to employ an attorney to assist in collection, you
agree to pay all of the expenses of collection.
(e) The portion of the amounts owed by you for a policy authorized
under the Act that are owed to FCIC may be collected in part through
administrative offset from payments you receive from United States
government agencies in accordance with 31 U.S.C. chapter 37. Such
amounts include all administrative fees, and the share of the overpaid
indemnities and premiums retained by FCIC plus any interest owed
thereon.
25. [Reserved]
26. Interest Limitations
We will pay simple interest computed on the net indemnity ultimately
found to be due by us or by a final judgment of a court of competent
jurisdiction, from and including the 61st day after the date you sign,
date, and submit to us the properly completed claim on our form.
Interest will be paid only if the reason for our failure to timely pay
is NOT due to your failure to provide information or other material
necessary for the computation or payment of the indemnity. The interest
rate will be that established by the Secretary of the Treasury under
section 12 of the Contract Disputes Act of 1978 (41 U.S.C. 611) and
published in the Federal Register semiannually on or about January 1 and
July 1 of each year, and may vary with each publication.
27. Concealment, Misrepresentation or Fraud
(a) If you have falsely or fraudulently concealed the fact that you
are ineligible to receive benefits under the Act or if you or anyone
assisting you has intentionally concealed or misrepresented any material
fact relating to this policy:
(1) This policy will be voided; and
(2) You may be subject to remedial sanctions in accordance with 7
CFR part 400, subpart R.
(b) Even though the policy is void, you may still be required to pay
20 percent of the premium due under the policy to offset costs incurred
by us in the service of this policy. If previously paid, the balance of
the premium will be returned.
(c) Voidance of this policy will result in you having to reimburse
all indemnities paid for the crop year in which the voidance was
effective.
(d) Voidance will be effective on the first day of the insurance
period for the crop year in which the act occurred and will not affect
the policy for subsequent crop years unless a violation of this section
also occurred in such crop years.
28. Transfer of Coverage and Right to Indemnity
If you transfer any part of your share during the crop year, you may
transfer your coverage rights, if the transferee is eligible for crop
insurance. We will not be liable for any more than the liability
determined in accordance with your policy that existed before the
transfer occurred. The transfer of coverage rights must be on our form
and will
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not be effective until approved by us in writing. Both you and the
transferee are jointly and severally liable for the payment of the
premium and administrative fees. The transferee has all rights and
responsibilities under this policy consistent with the transferee's
interest.
29. Assignment of Indemnity
You may assign to another party your right to an indemnity for the
crop year. The assignment must be on our form and will not be effective
until approved in writing by us. The assignee will have the right to
submit all loss notices and forms as required by the policy. If you have
suffered a loss from an insurable cause and fail to file a claim for
indemnity within 60 days after the end of the insurance period, the
assignee may submit the claim for indemnity not later than 15 days after
the 60-day period has expired. We will honor the terms of the assignment
only if we can accurately determine the amount of the claim. However, no
action will lie against us for failure to do so.
30. Subrogation (Recovery of Loss From a Third Party)
Since you may be able to recover all or a part of your loss from
someone other than us, you must do all you can to preserve this right.
If you receive any compensation for your loss, excluding private hail
insurance payments and payments covered by section 35, and the indemnity
due under this policy plus the amount you receive from the person
exceeds the amount of your actual loss, the indemnity will be reduced by
the excess amount, or if the indemnity has already been paid, you will
be required to repay the excess amount, not to exceed the amount of the
indemnity. The total amount of the actual loss is the difference between
the value of the insured crop before and after the loss, based on your
production records and the highest price election or amount of insurance
available for the crop. If we pay you for your loss, your right to
recovery will, at our option, belong to us. If we recover more than we
paid you plus or expenses, the excess will be paid to you.
31. Applicability of State and Local Statutes
If the provisions of this policy conflict with statutes of the State
or locality in which this policy is issued, the policy provisions will
prevail. State and local laws and regulations in conflict with federal
statutes, this policy, and the applicable regulations do not apply to
this policy.
32. Descriptive Headings
The descriptive headings of the various policy provisions are
formulated for convenience only and are not intended to affect the
construction or meaning of any of the policy provisions.
33. Notices
(a) All notices required to be given by you must be in writing and
received by your crop insurance agent within the designated time unless
otherwise provided by the notice requirement. Notices required to be
given immediately may be by telephone or in person and confirmed in
writing. Time of the notice will be determined by the time of our
receipt of the written notice. If the date by which you are required to
submit a report or notice falls on Saturday, Sunday, or a Federal
holiday, or if your agent's office is, for any reason, not open for
business on the date you are required to submit such notice or report,
such notice or report must be submitted on the next business day.
(b) All notices and communications required to be sent by us to you
will be mailed to the address contained in your records located with
your crop insurance agent. Notice sent to such address will be
conclusively presumed to have been received by you. You should advise us
immediately of any change of address.
34. Unit Division
(a) You may elect an enterprise unit or a whole farm unit if the
Special Provisions allow such unit structure, subject to the following:
(1) You must make such election on or before the earliest sales
closing date for the insured crops and report such unit structure to us
in writing. Your unit selection will remain in effect from year to year
unless you notify us in writing by the earliest sales closing date for
the crop year for which you wish to change this election. These units
may not be further divided except as specified herein;
(2) For an enterprise unit:
(i) You must report the acreage for each optional or basic unit on
your acreage report that comprises the enterprise unit;
(ii) These basic units or optional units that comprise the
enterprise unit must each have insurable planted acreage of the same
crop in the crop year insured;
(iii) You must comply with all reporting requirements for the
enterprise unit (While separate records of acreage and production for
basic or optional units must be maintained, if you want to change your
unit structure in subsequent crop years, it is not required to qualify
for an enterprise unit);
(iv) The qualifying basic units or optional units may not be
combined into an enterprise unit on any basis other than as described
herein;
(v) If you do not comply with the production reporting provisions
for the enterprise unit, your yield for the enterprise unit will
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be determined in accordance with section 3(e)(1);
(vi) At any time we discover you do not qualify for an enterprise
unit, we will assign the basic unit structure; and
(vii) The discount contained in the actuarial documents will only
apply to acreage in the enterprise unit that has been planted.
(3) For a whole farm unit:
(i) You must report on your acreage report the acreage for each
optional or basic unit for each crop produced in the county that
comprises the whole farm unit;
(ii) Although you may insure all of your crops under a whole farm
unit, you will be required to pay separate applicable administrative
fees for each crop included in the whole farm unit; and
(iii) At any time we discover you do not qualify for a whole farm
unit, we will assign the basic unit structure.
(b) Unless limited by the Crop Provisions or Special Provisions, a
basic unit as defined in section 1 of the Basic Provisions may be
divided into optional units if, for each optional unit, you meet the
following:
(1) You must plant the crop in a manner that results in a clear and
discernible break in the planting pattern at the boundaries of each
optional unit;
(2) All optional units you select for the crop year are identified
on the acreage report for that crop year (Units will be determined when
the acreage is reported but may be adjusted or combined to reflect the
actual unit structure when adjusting a loss. No further unit division
may be made after the acreage reporting date for any reason);
(3) You have records, that are acceptable to us, for at least the
previous crop year for all optional units that you will report in the
current crop year (You may be required to produce the records for all
optional units for the previous crop year);
(4) You have records of marketed or stored production from each
optional unit maintained in such a manner that permits us to verify the
production from each optional unit, or the production from each optional
unit is kept separate until loss adjustment is completed by us; and
(c) Each optional unit must meet one or more of the following,
unless otherwise specified in the Crop Provisions or allowed by written
agreement:
(1) Optional units may be established if each optional unit is
located in a separate section. In the absence of sections, we may
consider parcels of land legally identified by other methods of measure
such as Spanish grants, as the equivalents of sections for unit
purposes. In areas which have not been surveyed using sections, section
equivalents or in areas where boundaries are not readily discernible,
each optional unit must be located in a separate FSA farm serial number;
(2) In addition to, or instead of, establishing optional units by
section, section equivalent or FSA farm serial number, optional units
may be based on irrigated and non-irrigated acreage. To qualify as
separate irrigated and non-irrigated optional units, the non-irrigated
acreage may not continue into the irrigated acreage in the same rows or
planting pattern. The irrigated acreage may not extend beyond the point
at which the irrigation system can deliver the quantity of water needed
to produce the yield on which the guarantee is based, except the corners
of a field in which a center-pivot irrigation system is used may be
considered as irrigated acreage if the corners of a field in which a
center-pivot irrigation system is used do not qualify as a separate non-
irrigated optional unit. In this case, production from both practices
will be used to determine your approved yield; and
(3) In addition to, or instead of, establishing optional units by
section, section equivalent or FSA farm serial number, or irrigated and
non-irrigated acreage, separate optional units may be established for
acreage of the insured crop grown and insured under an organic farming
practice. Certified organic, transitional and buffer zone acreages do
not individually qualify as separate units. (See section 37 for
additional provisions regarding acreage insured under an organic farming
practice).
(d) Optional units are not available for crops insured under a
Catastrophic Risk Protection Endorsement.
(e) If you do not comply fully with the provisions in this section,
we will combine all optional units that are not in compliance with these
provisions into the basic unit from which they were formed. We will
combine the optional units at any time we discover that you have failed
to comply with these provisions. If failure to comply with these
provisions is determined by us to be inadvertent, and the optional units
are combined into a basic unit, that portion of the additional premium
paid for the optional units that have been combined will be refunded to
you for the units combined.
35. Multiple Benefits
(a) If you are eligible to receive an indemnity under anadditional
coverage plan of insurance and are also eligible to receive benefits for
the same loss under any other USDA program, you may receive benefits
under both programs, unless specifically limited by the crop insurance
contract or by law.
(b) The total amount received from all such sources may not exceed
the amount of your actual loss. The total amount of the actual loss is
the difference between the fair market value of the insured commodity
before and after the loss, based on your production records and the
highest price election or amount of insurance available for the crop.
[[Page 131]]
(c) FSA will determine and pay the additional amount due you for any
applicable USDA program after first considering the amount of any crop
insurance indemnity.
36. Substitution of Yields.
(a) When you have actual yields in your production history database
that, due to an insurable cause of loss, are less than 60 percent of the
applicable transitional yield (T-yield) you may elect, on an individual
actual yield basis, to exclude and replace one or more of any such
yields within each database.
(b) Each election made in section 36(a) must be made on or before
the production reporting date for the insured crop and each such
election will remain in effect for succeeding years unless cancelled by
the production reporting date for the succeeding crop year. If you
cancel an election, the actual yield will be used in the database. For
example, if you elected to substitute yields in your database for the
1998 and 2000 crop year, for any subsequent crop year, you can elect to
cancel the substitution for either or both years.
(c) Each excluded actual yield will be replaced with a yield equal
to 60 percent of the applicable T-yield for the crop year in which the
yield is being replaced (For example, if you elect to exclude a 2001
crop year actual yield, the T-yield in effect for the 2001 crop year in
the county will be used. If you also elect to exclude a 2002 crop year
actual yield, the T-yield in effect for the 2002 crop year in the county
will be used). The replacement yields will be used in the same manner as
actual yields for the purpose of calculating the approved yield.
(d) Once you have elected to exclude an actual yield from the
database, the replacement yield will remain in effect until such time as
that crop year is no longer included in the database unless this
election is cancelled in accordance with section 36(b).
(e) Although your approved yield will be used to determine your
amount of premium owed, the premium rate will be increased to cover the
additional risk associated with the substitution of higher yields.
37. Organic Farming Practices.
(a) In accordance with section 8(b)(2), insurance will not be
provided for any crop grown using an organic farming practice, unless
the information needed to determine a premium rate for an organic
farming practice is specified on the actuarial table, or insurance is
allowed by a written agreement.
(b) If insurance is provided for an organic farming practice as
specified in section 37(a), only the following acreage will be insured
under such practice:
(1) Certified organic acreage;
(2) Transitional acreage being converted to certified organic
acreage in accordance with an organic plan; and
(3) Buffer zone acreage.
(c) On the date you report your acreage, you must have:
(1) For certified organic acreage, a written certification in effect
from a certifying agent indicating the name of the entity certified,
effective date of certification, certificate number, types of
commodities certified, and name and address of the certifying agent (A
certificate issued to a tenant may be used to qualify a landlord or
other similar arrangement);
(2) For transitional acreage, a certificate as described in section
37(c)(1), or written documentation from a certifying agent indicating an
organic plan is in effect for the acreage; and
(3) Records from the certifying agent showing the specific location
of each field of certified organic, transitional, buffer zone, and
acreage not maintained under organic management.
(d) If you claim a loss on any acreage insured under an organic
farming practice, you must provide us with copies of the records
required in section 37(c).
(e) If any acreage qualifies as certified organic or transitional
acreage on the date you report such acreage, and such certification is
subsequently revoked by the certifying agent, or the certifying agent no
longer considers the acreage as transitional acreage for the remainder
of the crop year, that acreage will remain insured under the reported
practice for which it qualified at the time the acreage was reported.
Any loss due to failure to comply with organic standards will be
considered an uninsured cause of loss.
(f) Contamination by application or drift of prohibited substances
onto land on which crops are grown using organic
[[Page 132]]
farming practices will not be an insured peril on any certified organic,
transitional or buffer zone acreage.
(g) In addition to the provisions contained in section 17(f),
prevented planting coverage will not be provided for any acreage based
on an organic farming practice in excess of the number of acres that
will be grown under an organic farming practice and shown as such in the
records required in section 37(c).
(h) In lieu of the provisions contained in section 17(f)(1) that
specify prevented planting acreage within a field that contains planted
acreage will be considered to be acreage of the same practice that is
planted in the field, prevented planting acreage will be considered as
organic practice acreage if it is identified as certified organic,
transitional, or buffer zone acreage in the organic plan.
[56 FR 1351, Jan. 14, 1991, as amended at 58 FR 58262, 58263, Nov. 1,
1993; 59 FR 42751, Aug. 19, 1994; 62 FR 65154, Dec. 10, 1997; 63 FR
40634, July 30, 1998; 63 FR 66712, Dec. 3, 1998; 64 FR 40742, July 28,
1999; 65 FR 40485, June 30, 2000; 68 FR 37723, June 25, 2003; 68 FR
43457, July 23, 2003; 69 FR 48738, Aug. 10, 2004; 69 FR 74405, Dec. 14,
2004]
Sec. 457.9 Appropriation contingency.
Notwithstanding the cancellation date stated in the policy, if there
are insufficient funds appropriated by the Congress to deliver the crop
insurance program, the policy will automatically terminate without
liability.
[59 FR 45972, Sept. 6, 1994]
Sec. 457.10-457.100 [Reserved]
Sec. 457.101 Small grains crop insurance.
The small grains crop insurance provisions for the 2004 and
succeeding crop years are as follows:
United States Department of Agriculture
Federal Crop Insurance Corporation
Small Grains Crop Provisions
If a conflict exists among the policy provisions, the order of
priority is as follows: (1) The Catastrophic Risk Protection
Endorsement, if applicable; (2) the Special Provisions; (3) these Crop
Provisions; and (4) the Basic Provisions with (1) controlling (2), etc.
1. Definitions
Adequate stand--A population of live plants per unit of acreage
which will produce at least the yield used to establish your production
guarantee.
Harvest--Combining or threshing the insured crop for grain or
cutting for hay or silage on any acreage. A crop which is swathed prior
to combining is not considered harvested.
Initially planted--The first occurrence of planting the insured crop
on insurable acreage for the crop year.
Khorasan. The common name for a variety of wheat (Triticum
turanicum) that is marketed under trademarks such as Kamut. Khorasan is
considered to be spring wheat for the purposes of this policy.
Latest final planting date--
(1) The final planting date for spring-planted acreage in all
counties for which the Special Provisions designate a final planting
date for spring-planted acreage only;
(2) The final planting date for fall-planted acreage in all counties
for which the Special Provisions designate a final planting date for
fall-planted acreage only; or
(3) The final planting date for spring-planted acreage in all
counties for which the Special Provisions designate final planting dates
for both spring-planted and fall-planted acreage.
Local market price. The cash grain price per bushel for the
applicable quality level indicated below and offered by buyers in the
area in which you normally market the insured crop. The local market
price will reflect the maximum limits of quality deficiencies allowable
for the applicable quality level indicated below. Factors not associated
with the specified quality levels, including but not limited to protein,
oil or moisture content, or milling quality will not be considered.
(1) U.S. No. 2 for Wheat (subclass hard amber durum for durum wheat
and subclass northern spring for hard red spring wheat), except
Khorasan; barley (including hull-less barley); oats (including hull-less
oats); rye; and flax.
(2) The quality factor levels required for durum wheat to grade U.S.
No. 2 for Khorasan.
(3) No. 2 grade buckwheat determined in accordance with the
applicable state grading standards.
Nurse crop (companion crop)--A crop planted into the same acreage as
another crop, that is intended to be harvested separately, and which is
planted to improve growing conditions for the crop with which it is
grown.
Planted acreage--In addition to the definition contained in the
Basic Provisions, except for flax, land on which seed is initially
spread onto the soil surface by any method
[[Page 133]]
and subsequently is mechanically incorporated into the soil in a timely
manner and at the proper depth will be considered planted. Flax seed
must initially be planted in rows to be considered planted, unless
otherwise provided by the Special Provisions, actuarial documents, or by
written agreement.
Prevented planting. In lieu of the definition contained in the Basic
Provisions, failure to plant the insured crop with proper equipment by
the latest final planting date designated in the Special Provisions for
the insured crop in the county. You may also be eligible for a prevented
planting payment if you failed to plant the insured crop with the proper
equipment within the applicable late planting period following the
latest final planting date. You must have been prevented from planting
the insured crop due to an insured cause of loss that is general in the
surrounding area and that prevents other producers from planting acreage
with similar characteristics.
Sales closing date--In lieu of the definition contained in the Basic
Provisions, a date contained in the Special Provisions by which an
application must be filed and by which you may change your crop
insurance coverage for a crop year. If the Special Provisions provide a
sales closing date for both winter and spring types of the insured crop
and you plant any insurable acreage of the winter type, you may not
change your crop insurance coverage after the sales closing date for the
winter type.
Small grains. Wheat, including only common wheat (Triticum
aestivum), club wheat (T. compactum), durum wheat (T. durum) and
Khorasan (T. turanicum); barley (Hordeum vulgare), including hull-less
barley and excluding black barley; oats (Avena sativa, and A.
byzantina), and hull-less oats (A. Nuda); rye (Secale cereale); flax
(Linum usitatissimum); and buckwheat (Fagopyrum esculentum).
Swathed-- Severance of the stem and grain head from the ground
without removal of the seed from the head and placing into a windrow.
2. Unit Division
In addition to the requirements of section 34(b) of the Basic
Provisions, for wheat only, in addition to, or instead of, establishing
optional units by section, section equivalent or FSA farm serial number
and by irrigated and non-irrigated practices, optional units may be
established if each optional unit contains only initially planted winter
wheat, only initially planted spring wheat, only initially planted club
wheat or only initially planted durum wheat. Separate optional units for
initially planted winter wheat and initially planted spring wheat may be
established only in counties having both winter and spring type final
planting dates as designated in the Special Provisions. A separate
optional unit for club wheat may be established only in counties for
which the Special Provisions designate club wheat as a wheat type
(separate optional units may be established for initially planted winter
club and initially planted spring club wheat if the Special Provisions
specify both as wheat types). A separate optional unit for durum wheat
may be established only in counties for which the Special Provisions
designate durum wheat as a separate wheat type (separate optional units
may be established for initially planted winter durum wheat and
initially planted spring durum wheat if the Special Provisions specify
both as wheat types).
3. Insurance Guarantees, Coverage Levels, and Prices for Determining
Indemnities
(a) In addition to the requirements of section 3 of the Basic
Provisions, you may select only one price election for each crop in the
county insured under this policy unless the Special Provisions provide
different price elections by type, in which case each type must be
insured using the price election for the respective type. The price
elections you choose for each type must have the same percentage
relationship to the maximum price offered by us for each type. For
example, if you choose 100 percent of the maximum price election for one
type, you must also choose 100 percent of the maximum price election for
all other types.
(b) In addition to the requirements of section 3 of the Basic
Provisions, in counties with both fall and spring sales closing dates
for the insured crop, you may only change your coverage level or price
election until the spring sales closing date if you do not have any
insured fall planted acreage of the insured crop. If you have any
insured fall planted acreage of the insured crop, you may not change
your coverage level or price election after the fall sales closing date.
4. Contract Changes
In accordance with section 4 of the Basic Provisions, the contract
change date is November 30 preceding the cancellation date for counties
with a March 15 cancellation date and June 30 preceding the cancellation
date for all other counties.
5. Cancellation and Termination Dates
The cancellation and termination dates are:
[[Page 134]]
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Crop, state and county Cancellation date Termination date
----------------------------------------------------------------------------------------------------------------
Wheat:
All Colorado counties except September 30........................ September 30.
Alamosa, Archuleta, Conejos,
Costilla, Custer, Delta, Dolores,
Eagle, Garfield, Grand, La Plata,
Mesa, Moffat, Montezuma, Montrose,
Ouray, Pitkin, Rio Blanco, Rio
Grande, Routt, Saguache, and San
Miguel; all Iowa counties except
Plymouth, Cherokee, Buena Vista,
Pocahontas, Humbolt, Wright,
Franklin, Butler, Black Hawk,
Buchanan, Delaware, Dubuque and all
Iowa counties north thereof; all
Wisconsin counties except Buffalo,
Trempealeau, Jackson, Wood,
Portage, Waupaca, Outagamie, Brown,
Kewaunee and all Wisconsin counties
north thereof; all other states
except Alaska, Arizona, California,
Connecticut, Idaho, Maine,
Massachusetts, Minnesota, Montana,
Nevada, New Hampshire, New York,
North Dakota, Oregon, Rhode Island,
South Dakota, Utah, Vermont,
Washington, and Wyoming.
Del Norte, Humboldt, Lassen, Modoc, September 30........................ November 30.
Plumas, Shasta, Siskiyou and
Trinity Counties, California;
Archuleta, Custer, Delta, Dolores,
Eagle, Garfield, Grand, La Plata,
Mesa, Moffat, Montezuma, Montrose,
Ouray, Pitkin, Rio Blanco, Routt
and San Miguel Counties, Colorado;
Connecticut; Idaho; Plymouth,
Cherokee, Buena Vista, Pocahontas,
Humbolt, Wright, Franklin, Butler,
Black Hawk, Buchanan, Delaware and
Dubuque Counties, Iowa, and all
Iowa counties north thereof;
Massachusetts; all Montana counties
except Daniels and Sheridan; New
York; Oregon; Rhode Island; all
South Dakota counties except
Corson, Walworth, Edmunds, Faulk,
Spink, Beadle, Kingsbury, Miner,
McCook, Turner, Yankton and all
South Dakota counties north and
east thereof; Washington; Buffalo,
Trempealeau, Jackson, Wood,
Portage, Waupaca, Outagamie, Brown
and Kewaunee Counties, Wisconsin,
and all Wisconsin counties north
thereof; all Wyoming counties
except Big Horn, Fremont, Hot
Springs, Park, and Washakie.
Arizona; all California counties October 31.......................... November 30.
except Del Norte, Humboldt, Lassen,
Modoc, Plumas, Shasta, Siskiyou and
Trinity; Nevada; and Utah.
Alaska; Alamosa, Conejos, Costilla, March 15............................ March 15.
Rio Grande and Saguache Counties,
Colorado; Maine; Minnesota; Daniels
and Sheridan Counties, Montana; New
Hampshire; North Dakota; Corson,
Walworth, Edmunds, Faulk, Spink,
Beadle, Kingsbury, Miner, McCook,
Turner, and Yankton Counties, South
Dakota, and all South Dakota
counties north and east thereof;
Vermont; and Big Horn, Fremont, Hot
Springs, Park, and Washakie
Counties, Wyoming.
Barley:
All New Mexico counties except Taos; September 30........................ September 30.
Texas, Oklahoma, Missouri,
Illinois, Indiana, Ohio,
Pennsylvania, New Jersey and all
states south and east thereof.
Kit Carson, Lincoln, Elbert, El September 30........................ November 30.
Paso, Pueblo and Las Animas
Counties, Colorado, and all
Colorado counties south and east
thereof; Connecticut; Kansas;
Massachusetts; New York; and Rhode
Island.
Arizona; all California counties October 31.......................... November 30.
except Del Norte, Humboldt, Lassen,
Modoc, Plumas, Shasta, Siskiyou and
Trinity; Clark, Humboldt, Nye and
Pershing Counties, Nevada; and Box
Elder, Millard and Utah Counties,
Utah.
Del Norte, Humboldt, Lassen, Modoc, March 15............................ March 15.
Plumas, Shasta, Siskiyou and
Trinity Counties, California; All
Colorado counties except Kit
Carson, Lincoln, Elbert, El Paso,
Pueblo and Las Animas, and all
Colorado counties south and east
thereof; all Nevada counties except
Clark, Humboldt, Nye and Pershing;
Taos County, New Mexico; all Utah
counties except Box Elder, Millard
and Utah; and all other states
except Arizona, and (except) Texas,
Oklahoma, Missouri, Illinois,
Indiana, Ohio, Pennsylvania, New
Jersey and all states south and
east thereof.
Oats:
Alabama; Arkansas; Florida; Georgia; September 30........................ September 30.
Louisiana; Mississippi; All New
Mexico counties except Taos County;
North Carolina; Oklahoma; South
Carolina; Tennessee; Texas; and
Patrick, Franklin, Pittsylvania,
Campbell, Appomattox, Fluvanna,
Buckingham, Louisa, Spotsylvania,
Caroline, Essex, and Westmoreland
Counties, Virginia, and all
Virginia counties east thereof.
Arizona; All California counties October 31.......................... October 31.
except Del Norte, Humboldt, Lassen,
Modoc, Plumas, Shasta, Siskiyou and
Trinity.
[[Page 135]]
Del Norte, Humbolt, Lassen, Modoc, March 15............................ March 15.
Plumas, Shasta, Siskiyou, and
Trinity Counties, California; Taos
County, New Mexico; all Virginia
counties except Patrick, Franklin,
Pittsylvania, Campbell, Attomattox,
Fluvanna, Buckingham, Louisa,
Spotsylvania, Caroline, Essex, and
Westmoreland, and all Virginia
counties east thereof; and all
other states except Alabama,
Arizona, Arkansas, Florida,
Georgia, Louisiana, Mississippi,
North Carolina, Oklahoma, South
Carolina, Tennessee, and Texas.
Rye:
All states.......................... September 30........................ September 30.
Flax:
All states.......................... March 15............................ March 15.
Buckwheat:
All states.......................... March 15............................ March 15.
----------------------------------------------------------------------------------------------------------------
6. Insured Crop
(a) The crop insured will be each small grain you elect to insure,
that is grown in the county on insurable acreage, and for which premium
rates are provided by the actuarial documents:
(1) In which you have a share;
(2) That is planted for harvest as grain (a grain mixture in which
barley or oats is the predominate grain may also be insured if allowed
by the Barley or Oat Special Provisions, or if we agree in writing to
insure such mixture. The crop insured will be the grain which is
predominate in the mixture. The production from such mixture will be
considered as the predominate grain on a weight basis);
(3) That is not:
(i) Interplanted with another crop except as allowed in paragraph
6.(a)(2);
(ii) Planted into an established grass or legume; or
(iii) Planted as a nurse crop, unless planted as a nurse crop for
new forage seeding, but only if seeded at a normal rate and intended for
harvest as grain.
(4) We may agree, in writing, to insure a crop prohibited under
paragraph 6.(a)(3) if you so request. Your request to insure such crop
must be in writing, and submitted to your agent not later than 15 days
after the acreage reporting date.
(b) If you anticipate destroying any acreage prior to harvest you:
(1) May report all planted acreage when you report your acreage for
the crop year and specify any acreage to be destroyed as uninsurable
acreage (By doing so, no coverage will be considered to have attached on
the specified acreage and no premium will be due for such acreage. If
you do not destroy such acreage, you will be subject to the under-
reporting provisions contained in section 6 of the Basic Provisions); or
(2) May report all planted acreage as insurable when you report your
acreage for the crop year. Premium will be due on all the acreage except
as set forth herein. If the Special Provisions allow a reduced premium
amount for acreage intentionally destroyed prior to harvest, you may
qualify for such reduction only if you notify us in writing on or before
the date designated in the Special Provisions of the intended
destruction, and do not claim an indemnity on the acreage. No premium
reduction will be allowed if the required notice is not given or if you
claim an indemnity for the acreage. Upon receiving timely notice,
insurance coverage on the acreage you do not intend to harvest will
cease and we will revise your acreage report to indicate the applicable
reduction in premium. If you do not destroy the crop as intended, you
will be subject to the under-reporting provisions contained in section 6
of the Basic Provisions.
(c) In counties for which the actuarial table provides premium rates
for the Wheat or Barley Winter Coverage Endorsement (7 CFR 457.102),
additional coverage is available for wheat or barley damaged between the
time coverage begins and the spring final planting date. Coverage under
the endorsement is effective only if you qualify under the terms of the
endorsement and you execute the endorsement by the sales closing date.
(d) In counties for which the actuarial table provides premium rates
for malting barley coverage, an endorsement is available (7 CFR 457.118)
that provides additional insurance protection for malting barley. This
endorsement provides coverage for producers who grow malting barley
under contract and for those who do not have a contract. Coverage under
the endorsement is effective only if you qualify under the terms of the
endorsement and you execute the endorsement by the sales closing date.
7. Insurance Period
In lieu of the requirements under section 11 (Insurance Period) of
the Basic Provisions (Sec. 457.8), and subject to any provisions
provided by the Wheat or Barley Winter Coverage Endorsement (Sec.
457.102) if you have elected such endorsement, the insurance period is
as follows:
[[Page 136]]
(a) Insurance attaches on each unit or part thereof on the later of
the date we accept your application or the date the insured crop is
planted.
(1) For oats, rye, flax and buckwheat, the following limitations
apply:
(i) The acreage must be planted on or before the final planting date
designated in the Special Provisions for the insured crop except as
allowed in section 12 of these Crop Provisions and section 16 of the
Basic Provisions.
(ii) Any acreage of the insured crop damaged before the final
planting date, to the extent that producers in the surrounding area
would not normally further care for the crop, must be replanted unless
we agree that it is not practical to replant.
(2) For barley and wheat, the following limitations apply:
(i) The acreage must be planted on or before the final planting date
designated in the Special Provisions for the type (winter or spring)
except as allowed in section 12 of these Crop Provisions and section 16
of the Basic Provisions.
(ii) Whenever the Special Provisions designate only a fall final
planting date, any acreage of winter barley or wheat damaged before such
final planting date, to the extent that growers in the area would
normally not further care for the crop, must be replanted to a winter
type of the insured crop unless we agree that replanting is not
practical.
(iii) Whenever the Special Provisions designate both fall and spring
final planting dates, any winter barley or winter wheat that is damaged
before the spring final planting date, to the extent that growers in the
area would normally not further care for the crop, must be replanted to
a winter type of the insured crop to maintain insurance based on the
winter type unless we agree that replanting is not practical. If it is
not practical to replant to the winter type of wheat or barley but is
practical to replant to a spring type, you must replant to a spring type
to keep your insurance based on the winter type in force. Any winter
barley or winter wheat acreage that is replanted to a spring type of the
same crop when it was practical to replant the winter type will be
insured as the spring type and the production guarantee, premium and
price election applicable to the spring type will be used. In this case,
the acreage will be considered to be initially planted to the spring
type. If you have elected coverage under a barley or wheat winter
coverage endorsement (if available in the county), insurance will be in
accordance with the option.
(iv) Whenever the Special Provisions designate a spring final
planting date, any acreage of spring barley or wheat damaged before such
final planting date, to the extent that growers in the area would
normally not further care for the crop, must be replanted to a spring
type of the insured crop unless we agree that replanting is not
practical.
(v) Whenever the Special Provisions designate only a spring final
planting date, any acreage of fall planted barley or fall planted wheat
is not insured unless you request such coverage on or before the spring
sales closing date, and we agree in writing that the acreage has an
adequate stand in the spring to produce the yield used to determine your
production guarantee. The fall planted barley or fall planted wheat will
be insured as a spring type for the purpose of the production guarantee,
premium and price election. Insurance will attach to such acreage on the
date we determine an adequate stand exists or on the spring final
planting date if we do not determine adequacy of the stand by the spring
final planting date. Any acreage of such fall planted barley or fall
planted wheat that is damaged after it is accepted for insurance but
before the spring final planting date, to the extent that growers in the
area would normally not further care for the crop, must be replanted to
a spring type of the insured crop unless we agree it is not practical to
replant. If fall planted acreage is not to be insured it must be
recorded on the acreage report as uninsured fall planted acreage.
(b) Insurance ends on each unit at the earliest of:
(1) Total destruction of the insured crop on the unit;
(2) Harvest of the unit;
(3) Final adjustment of a loss on the unit;
(4) The following applicable date of the calendar year in which the
crop is normally harvested:
(i) September 25 following planting in Alaska;
(ii) July 31 in Alabama, Arizona, Arkansas, Connecticut, Delaware,
Florida, Georgia, Kentucky, Louisiana, Maryland, Mississippi, New
Jersey, North Carolina, South Carolina and Tennessee; or
(iii) October 31 in all other states; or
(5) Abandonment of the crop on the unit.
8. Causes of Loss
In addition to the provisions under section 12 (Causes of Loss) of
the Basic Provisions, any loss covered by this policy must occur within
the insurance period.
The specific causes of loss for small grains are:
(a) Adverse weather conditions;
(b) Fire;
(c) Insects, but not damage allowed because of insufficient or
improper application of pest control measures;
(d) Plant disease, but not damage allowed because of insufficient or
improper application of disease control measures;
(e) Wildlife;
(f) Earthquake;
(g) Volcanic eruption; or
(h) Failure of the irrigation water supply.
[[Page 137]]
9. Replanting Payments
(a) A replanting payment is allowed as follows:
(1) In lieu of provisions in section 13 of the Basic Provisions that
limit the amount of a replant payment to the actual cost of replanting,
the amount of any replanting payment will be determined in accordance
with these crop provisions;
(2) You must comply with all requirements regarding replanting
payments contained in section 13 of the Basic Provisions (except as
allowed in section 9(a)(1)) and in any winter coverage endorsement for
which you are eligible and which you have elected;
(3) The insured crop must be damaged by an insurable cause of loss
to the extent that the remaining stand will not produce at least 90
percent of the production guarantee for the acreage;
(4) The acreage must have been initially planted to a spring type of
the insured crop in those counties with only a spring final planting
date;
(5) Damage must occur after the fall final planting date in those
counties where both a fall and spring final planting date are designated
(If the Special Provisions provide more than one fall final planting
date, the fall final planting date applicable to policies with the Wheat
or Barley Winter Coverage Endorsement will be used for this purpose,
regardless of whether or not the endorsement is actually in effect.);
and
(6) The replanted crop must be seeded at a rate sufficient to
achieve a total (undamaged and new seeding) plant population that will
produce at least the yield used to determine your production guarantee.
(b) No replanting payment will be made for acreage initially planted
to a winter type of the insured crop (including rye) in any county for
which the Special Provisions contain only a fall final planting date
(including final planting dates in December, January and February).
(c) The maximum amount of the replanting payment per acre will be
the lesser of 20.0 percent of the production guarantee or the number of
bushels for the applicable crop specified below, multiplied by your
price election and your share:
(1) 2 bushels for flax or buckwheat;
(2) 4 bushels for wheat; or
(3) 5 bushels for barley or oats.
(d) When the crop is replanted using a practice that is uninsurable
for an original planting, the liability on the unit will be reduced by
the amount of the replanting payment. The premium amount will not be
reduced.
(e) Replanting payments will be calculated using the price election
and production guarantee for the crop type that is replanted and
insured. For example, if damaged spring wheat is replanted to durum
wheat, the price election applicable to durum wheat will be used to
calculate any replanting payment that may be due. A revised acreage
report will be required to reflect the replanted type. Notwithstanding
the previous two sentences, the following will have a replanting payment
based on the guarantee and price election for the crop type initially
planted:
(1) Any damaged winter crop type that is replanted to a spring crop
type, but that retains insurance based on the winter crop type guarantee
and price election; and
(2) Any acreage replanted at a reduced seeding rate into a partially
damaged stand of the insured crop.
10. Duties in the Event of Damage or Loss
In addition to your duties under section 14 of the Basic Provisions
(Sec. 457.8), if you initially discover damage to any insured crop
within 15 days of, or during harvest, you must leave representative
samples of the unharvested crop for our inspection. The samples must be
at least 10 feet wide and the entire length of each field in the unit,
and must not be harvested or destroyed until the earlier of our
inspection or 15 days after harvest of the balance of the unit is
completed.
11. Settlement of Claim
(a) We will determine your loss on a unit basis. In the event you
are unable to provide records of production that are acceptable to us
for any:
(1) Optional unit, we will combine all optional units for which
acceptable records of production were not provided; or for any
(2) Basic unit, we will allocate any commingled production to such
units in proportion to our liability on the harvested acreage for each
unit.
(b) In the event of loss or damage covered by this policy, we will
settle your claim by:
(1) Multiplying the insured acreage by its respective production
guarantee;
(2) Multiplying each result in section 11(b)(1) by the respective
price election;
(3) Totaling the results of section 11(b)(2);
(4) Multiplying the total production to be counted of each type, if
applicable (see sections 11(c), (d), and (e)), by the respective price
election;
(5) Totaling the results of section 11(b)(4);
(6) Subtracting the result of section 11(b)(5) from the result in
section 11(b)(3); and
(7) Multiplying the result of section 11(b)(6) by your share.
(c) The total production (bushels) to count from all insurable
acreage on the unit will include:
(1) All appraised production as follows:
(i) Not less than the production guarantee for acreage:
(A) Which is abandoned;
(B) Put to another use without our consent;
[[Page 138]]
(C) Damaged solely by uninsured causes; or
(D) For which you fail to provide records of production that are
acceptable to us;
(ii) Production lost due to uninsured causes;
(iii) Unharvested production (mature unharvested production may be
adjusted for quality deficiencies and excess moisture in accordance with
subsection 11.(d));
(iv) Potential production on insured acreage that you intend to put
to another use or abandon, if you and we agree on the appraised amount
of production. Upon such agreement, the insurance period for that
acreage will end when you put the acreage to another use or abandon the
crop. If agreement on the appraised amount of production is not reached:
(A) If you do not elect to continue to care for the crop, we may
give you consent to put the acreage to another use if you agree to leave
intact, and provide sufficient care for, representative samples of the
crop in locations acceptable to us (The amount of production to count
for such acreage will be based on the harvested production or appraisals
from the samples at the time harvest should have occurred. If you do not
leave the required samples intact, or you fail to provide sufficient
care for the samples, our appraisal made prior to giving you consent to
put the acreage to another use will be used to determine the amount of
production to count); or
(B) If you elect to continue to care for the crop, the amount of
production to count for the acreage will be the harvested production, or
our reappraisal if additional damage occurs and the crop is not
harvested; and
(d) Mature wheat, barley, oat, rye, and buckwheat production may be
adjusted for excess moisture and quality deficiencies. Flax production
may be adjusted for quality deficiencies only. If a moisture adjustment
is applicable, it will be made prior to any adjustment for quality.
(1) Production will be reduced by .12 percent for each .1 percentage
point of moisture in excess of:
(i) 13.5 percent for wheat;
(ii) 14.5 percent for barley;
(iii) 14.0 percent for oats; and
(iv) 16.0 percent for rye and buckwheat.
We may obtain samples of the production to determine the moisture
content.
(2) Production will be eligible for quality adjustment if:
(i) Deficiencies in quality, in accordance with the Official United
States Standards for Grain including the definition of terms used in
section 11(d), result in:
(A) Wheat, except Khorasan, not meeting the grade requirements for
U.S. No. 4 (grades U.S. No. 5 or worse) because of test weight; total
damaged kernels (heat-damaged kernels will not be considered to be
damaged); shrunken or broken kernels; defects (foreign material and heat
damage will not be considered to be defects); a musty, sour, or
commercially objectionable foreign odor (except smut odor); or grading
garlicky, light smutty, smutty or ergoty;
(B) Barley, except hull-less barley, not meeting the grade
requirements for U.S. No. 4 (grades U.S. No. 5 or worse) because of test
weight; percentage of sound barley (heat-damaged kernels will be
considered to be sound barley); damaged kernels (heat-damaged kernels
will not be considered to be damaged); thin barley; black barley; a
musty, sour, or commercially objectionable foreign odor (except smut or
garlic odor); or grading blighted, smutty, garlicky or ergoty;
(C) Oats, except hull-less oats, not meeting the grade requirements
for U.S. No. 4 (grade U.S. sample grade) because of test weight;
percentage of sound oats (heat-damaged kernels will be considered to be
sound oats); a musty, sour, or commercially objectionable foreign odor
(except smut or garlic odor); or grading smutty, thin, garlicky or
ergoty;
(D) Rye not meeting the grade requirements for U.S. No. 3 (grades
U.S. No. 4 or worse) because of test weight; percent damaged kernels
(heat-damaged kernels will not be considered to be damaged); thin rye; a
musty, sour, or commercially objectionable foreign odor (except smut or
garlic odor); or grading light smutty, smutty, light garlicky, garlicky,
or ergoty;
(E) Flaxseed not meeting the grade requirements for U.S. No. 2
(grades U.S. sample grade) due to test weight; damaged kernels (heat-
damaged kernels will not be considered to be damaged); or a musty, sour,
or commercially objectionable foreign odor (except smut or garlic odor);
(ii) Deficiencies in the quality of buckwheat, determined in
accordance with applicable state grading standards, result in it not
meeting No. 3 grade requirements due to test weight; a musty, sour or
commercially objectionable foreign odor (except smut or garlic odor); or
grading garlicky, smutty or ergoty if such grades are provided for by
the applicable state grading standards;
(iii) Quality factors for Khorasan fall below the levels contained
in the Official United States Standards for Grain that cause durum wheat
to grade less than U.S. No. 4. For example, if durum wheat grades less
than U.S. No. 4 when its test weight falls below 54.0 pounds per bushel,
Khorasan would be eligible for quality adjustment if its test weight
falls below 54.0 pounds per bushel. The same quality factors considered
for quality adjustment of durum wheat will be applicable and
determination of deficiencies will be made in accordance with the
Federal Grain Inspection Service directive that establishes procedures
for quality factor analysis of Khorasan seed. Quality adjustment
discount factors for U.S. grades specified in the Special Provisions
will also apply
[[Page 139]]
to Khorasan at the same levels applicable to durum wheat;
(iv) Quality factors for hull-less barley fall below the levels
contained in the Official United States Standards for Grain that cause
barley to grade less than U.S. No. 4. For example, if barley grades less
than U.S. No. 4 when its test weight falls below 40.0 pounds per bushel,
hull-less barley would be eligible for quality adjustment if its test
weight falls below 40.0 pounds per bushel. The same quality factors
considered for quality adjustment of barley will be applicable and
determination of deficiencies will be made in accordance with the
Federal Grain Inspection Service directive that establishes procedures
for quality factor analysis of hull-less barley. Quality adjustment
discount factors for U.S. grades specified in the Special Provisions
will also apply to hull-less barley at the same levels applicable to
barley;
(v) Quality factors for hull-less oats fall below the levels
contained in the Official United States Standards for Grain that cause
oats to grade less than U.S. No. 4. For example, if oats grade less than
U.S. No. 4 when its test weight falls below 27.0 pounds per bushel,
hull-less oats would be eligible for quality adjustment if the test
weight falls below 27.0 pounds per bushel. The same quality factors
considered for quality adjustment of oats will be applicable and
determination of deficiencies will be made in accordance with the
Federal Grain Inspection Service directive that establishes procedures
for quality factor analysis of hull-less oats. Quality adjustment
discount factors for U.S. grades specified in the Special Provisions
will also apply to hull-less oats at the same levels applicable to oats;
or
(vi) Substances or conditions are present, including mycotoxins,
that are identified by the Food and Drug Administration or other public
health organizations of the United States as being injurious to human or
animal health.
(3) Quality will be a factor in determining your loss only if:
(i) The deficiencies, substances, or conditions resulted from a
cause of loss against which insurance is provided under these crop
provisions;
(ii) All determinations of these deficiencies, substances, or
conditions are made using samples of the production obtained by us or by
a disinterested third party approved by us;
(iii) With regard to deficiencies in quality (except test weight,
which may be determined by our loss adjustor), the samples are analyzed
by:
(A) A grain grader licensed under the United States Grain Standards
Act or the United States Warehouse Act;
(B) A grain grader licensed under State law and employed by a
warehouse operator who has a commodity storage agreement with the
Commodity Credit Corporation; or
(C) A grain grader not licensed under State law, but who is employed
by a warehouse operator who has a commodity storage agreement with the
Commodity Credit Corporation and is in compliance with State law
regarding warehouses; and
(iv) With regard to substances or conditions injurious to human or
animal health, the samples are analyzed by a laboratory approved by us.
(4) Small grain production that is eligible for quality adjustment,
as specified in sections 11(d)(2) and (3), will be reduced by the
quality adjustment factor contained in the Special Provisions.
(e) Any production harvested from plants growing in the insured crop
may be counted as production of the insured crop on a weight basis.
12. Late Planting
A late planting period is applicable to small grains, except to any
barley or wheat acreage covered under the terms of the Wheat or Barley
Winter Coverage Endorsement. Barley or wheat covered under the terms of
the Winter Coverage Endorsement must be planted on or prior to the
applicable final planting date specified in the Special Provisions. In
counties having one fall final planting date for acreage covered under
the Wheat or Barley Winter Coverage Endorsement and another fall final
planting date for acreage not covered under the endorsement, the fall
late planting period will begin after the final planting date for
acreage not covered under the endorsement.
13. Prevented Planting
(a) In addition to the provisions contained in section 17 of the
Basic Provisions, in counties for which the Special Provisions designate
a spring final planting date, your prevented planting production
guarantee will be based on your approved yield for spring-planted
acreage of the insured crop.
(b) Your prevented planting coverage will be 60 percent of your
production guarantee for timely planted acreage. If you have limited or
additional levels of coverage, as specified in 7 CFR part 400, subpart
T, and pay an additional premium, you may increase your prevented
planting coverage to a level specified in the actuarial documents.
[59 FR 9391, Feb. 28, 1994, as amended at 60 FR 62723, Dec. 7, 1995; 62
FR 65164, Dec. 10, 1997; 67 FR 43526, June 28, 2002; 68 FR 34268, June
9, 2003]
[[Page 140]]
Sec. 457.102 Wheat or barley winter coverage endorsement.
United States Department of Agriculture
Federal Crop Insurance Corporation
Wheat or Barley Winter Coverage Endorsement
(This is a continuous endorsement)
1. In return for payment of the additional premium designated in the
actuarial documents, this endorsement is attached to and made part of
the Small Grains Crop Provisions subject to the terms and conditions
described herein.
2. This endorsement is available only in counties for which the
Special Provisions for the insured crop designate both a fall final
planting date and a spring final planting date, and for which the
actuarial documents provide a premium rate for this coverage.
3. You must have a Small Grains Crop Insurance Policy in force and
elect to insure barley or wheat under that policy.
4. You must select this coverage, by crop, on your application for
insurance. Failure to do so means you have rejected this coverage for
both wheat and barley and this endorsement is void.
5. In addition to the requirements of section 34(b) of the Basic
Provisions and section 2 of the Small Grains Crop Provisions, optional
units may be established for barley if each optional unit contains only
initially planted winter barley or only initially planted spring barley.
6. If you elect this endorsement for winter barley, the contract
change, cancellation, and termination dates applicable to wheat in the
county will be applicable to all your spring and winter barley.
7. Coverage under this endorsement begins on the later of the date
we accept your application for coverage or on the fall final planting
date designated in the Special Provisions. Coverage ends on the spring
final planting date designated in the Special Provisions.
8. The provisions of section 14 of the Basic Provisions are amended
to require that all notices of damage be provided to us by the spring
final planting date designated in the Special Provisions.
9. All eligible acreage of each crop covered under this endorsement
must be insured.
10. The amount of any indemnity paid under the terms of this
endorsement will be subject to any reduction specified in the Basic
Provisions for multiple crop benefits in the same crop year.
11. Whenever any winter wheat or barley is damaged during the
insurance period and at least 20 acres or 20 percent of the insured
planted acreage in the unit, whichever is less, does not have an
adequate stand to produce at least 90 percent of the production
guarantee for the acreage, you may, at your option, take one of the
following actions:
(a) Continue to care for the damaged crop. By doing so, coverage
will continue under the terms of the Basic Provisions, the Small Grains
Crop Insurance Provisions and this endorsement.
(b) Replant the acreage to an appropriate variety of the insured
crop, if it is practical, and receive a replanting payment in accordance
with the terms of section 9 (Replanting Payments) of the Small Grains
Crop Insurance Provisions. By doing so, coverage will continue under the
terms of the Basic Provisions, the Small Grains Crop Insurance
Provisions and this endorsement, and the production guarantee for winter
wheat or barley will remain in effect.
(c) Destroy the remaining crop on such acreage. By doing so, you
agree to accept an appraised amount of production determined in
accordance with section 11(c)(1) of the Small Grains Crop Insurance
Provisions to count against the unit production guarantee. This amount
will be considered production to count in determining any final
indemnity on the unit and will be used to settle your claim as described
in section 11 (Settlement of Claim) of the Small Grains Crop Insurance
Provisions. You may use such acreage for any purpose, including planting
and separately insuring any other crop if such insurance is available.
If you elect to plant and elect to insure a spring type of the same crop
(you must elect whether or not you want insurance on the spring type of
the same crop at the time we release the winter type acreage), you must
pay additional premium for the insurance. Such acreage will be insured
in accordance with the policy provisions that are applicable to acreage
that is initially planted to a spring type of the insured crop, and you
must:
(1) Plant the spring type in a manner which results in a clear and
discernable break in the planting pattern at the boundary between it and
any remaining acreage of the winter type; and
(2) Store or market the production in a manner which permits us to
verify the amount of spring type production separately from any winter
type production. In the event you are unable to provide records of
production that are acceptable to us, the spring type acreage will be
considered to be a part of the original winter type unit.
Option A (30 Percent Coverage and Acreage Release)
Whenever any winter wheat is damaged during the insurance period
(see section 3, above), and at least 20 acres or 20 percent of the
acreage in the unit, whichever is less, does not have an adequate stand
to produce at least 90 percent of the production guarantee for the
acreage, you may take any one of the following actions:
[[Page 141]]
(a) Destroy the remaining crop on such acreage. By doing so, you
agree to accept an amount of production to count against the unit
production guarantee equal to 70 percent of the production guarantee for
the damaged acreage, or an appraisal determined in accordance with
paragraph 11.(c)(1) of the Small Grains Crop Insurance Provisions (Sec.
457.101) if such an appraisal results in a greater amount of production.
This amount will be considered production to count in determining any
final indemnity on the unit and will be used to settle your claim as
described in the provisions under section 11. (Settlement of Claim) of
the Small Grains Crop Insurance Provisions (Sec. 457.101). You may use
such acreage for any purpose, including planting and separately insuring
any other crop. If you elect to utilize such acreage for the production
of spring wheat, you must:
(1) Plant the spring wheat in a manner which results in a clear and
discernible break in the planting pattern at the boundary between it and
any remaining winter wheat; and
(2) Store or market the production from such acreage in a manner
which permits us to verify the amount of spring wheat production
separately from any winter wheat production.
In the event you are unable to provide records of production that
are acceptable to us, the spring wheat acreage will be considered to be
a part of the original winter wheat unit. If you elected to insure the
spring wheat acreage as a separate optional unit, any premium amount for
such acreage will be considered earned and payable to us.
(b) Continue to care for the damaged crop. By doing so, coverage
will continue under the terms of the Common Crop Insurance Policy (Sec.
457.8), the Small Grains Crop Insurance Provisions (Sec. 457.101), and
this Option.
(c) Replant the acreage to an appropriate variety of wheat, if it is
practical, and receive a replanting payment in accordance with the terms
of section 9. (Replanting Payments) of the Small Grains Crop Provisions
(Sec. 457.101). By doing so, coverage will continue under the terms of
the Common Crop Insurance Policy (Sec. 457.8), the Small Grains Crop
Insurance Provisions (Sec. 457.101), and this Option, and the
production guarantee for winter wheat will remain in effect.
Option B (With Full Winter Damage Coverage)
Whenever any winter wheat is damaged during the insurance period and
at least 20 acres or 20 percent of the acreage in the unit, whichever is
less, does not have an adequate stand to produce at least 90 percent of
the production guarantee for the acreage, you may, at your option, take
one of the following actions:
(a) Continue to care for the damaged crop. By doing so, coverage
will continue under the terms of the Common Crop Insurance Policy (Sec.
457.8), the Small Grains Crop Insurance Provisions (Sec. 457.101), and
this Option.
(b) Replant the acreage to an appropriate variety of wheat, if it is
practical, and receive a replanting payment in accordance with the terms
of section 9. (Replanting Payments) of the Small Grains Crop Provisions
(Sec. 457.101). By doing so, coverage will continue under the terms of
the Common Crop Insurance Policy (Sec. 457.8), the Small Grains Crop
Insurance Provisions (Sec. 457.101), and this Option, and the
production guarantee for winter wheat will remain in effect.
(c) Accept our appraisal of the crop on the damaged acreage as
production to count against the production guarantee for the damaged
acreage, destroy the remaining crop on such acreage, and be eligible for
any indemnity due under the terms of the Common Crop Insurance Policy
(Sec. 457.8) and the Small Grains Crop Provisions (Sec. 457.101). The
appraisal will be considered production to count in determining any
final indemnity on the unit and will be used to settle your claim as
described in the provisions of section 11. (Settlement of Claim) of the
Small Grains Crop Insurance Provisions (Sec. 457.101). You may use such
acreage for any purpose, including planting and separately insuring any
other crop. If you elect to utilize such acreage for the production of
spring wheat, you must:
(1) Plant the spring wheat in a manner which results in a clear and
discernable break in the planting pattern at the boundary between it and
any remaining winter wheat; and
(2) Store or market the production from such acreage in a manner
which permits us to verify the amount of spring wheat production
separately from any winter wheat production.
In the event you are unable to provide records of production that
are acceptable to us, the spring wheat acreage will be considered to be
a part of the original winter wheat unit. If you elected to insure the
spring wheat acreage as a separate optional unit, any premium amount for
such acreage will be considered earned and payable to us.
[59 FR 9397, Feb. 28, 1994, as amended at 68 FR 34272, June 9, 2003]]
Sec. 457.103 [Reserved]
Sec. 457.104 Cotton crop insurance provisions.
The cotton crop insurance provisions for the 1998 and succeeding
crop years are as follows:
[[Page 142]]
United States Department of Agriculture
Federal Crop Insurance Corporation
Cotton Crop Provisions
If a conflict exists among the policy provisions, the order of
priority is as follows: (1) The Catastrophic Risk Protection
Endorsement, if applicable (2) the Special Provisions; (3) these Crop
Provisions; and (4) the Basic Provisions with (1) controlling (2), etc.
1. Definitions
Cotton--Varieties identified as American Upland Cotton.
Growth area--A geographic area designated by the Secretary of
Agriculture for the purpose of reporting cotton prices.
Harvest--The removal of the seed cotton from the open cotton boll,
or the severance of the open cotton boll from the stalk by either manual
or mechanical means.
Mature cotton--Cotton that can be harvested either manually or
mechanically.
Planted acreage--In addition to the definition contained in the
Basic Provisions, cotton must be planted in rows, unless otherwise
provided by the Special Provisions, actuarial documents, or by written
agreement. The yield conversion factor normally applied to non-irrigated
skip-row cotton acreage will not be used if the land between the rows of
cotton is planted to any other spring planted crop.
Production guarantee--The number of pounds determined by multiplying
the approved yield per acre by any applicable yield conversion factor
for non-irrigated skip-row planting patterns, and multiplying the result
by the coverage level percentage you elect.
Skip-row--A planting pattern that:
(1) Consists of alternating rows of cotton and fallow land or land
planted to another crop the previous fall; and
(2) Qualifies as a skip-row planting pattern as defined by the Farm
Service Agency (FSA) or a successor agency.
2. Insurance Guarantees, Coverage Levels, and Prices for Determining
Indemnities
In addition to the requirements of section 3 (Insurance Guarantees,
Coverage Levels, and Prices for Determining Indemnities) of the Basic
Provisions (Sec. 457.8), you may select only one price election for all
cotton in the county insured under this policy.
3. Contract Changes
The contract change date is November 30 (December 17 for the 1998
crop year only) preceding the cancellation date (see the provisions of
section 4 (Contract Changes) of the Basic Provisions).
4. Cancellation and Termination Dates
In accordance with section 2 (Life of Policy, Cancellation, and
Termination) of the Basic Provisions (Sec. 457.8), the cancellation and
termination dates are:
------------------------------------------------------------------------
Cancellation and
State and county termination dates
------------------------------------------------------------------------
Val Verde, Edwards, Kerr, Kendall, Bexar, January 15.
Wilson, Karnes, Goliad, Victoria, and Jackson
Counties, Texas, and all Texas counties lying
south thereof.
Alabama; Arizona; Arkansas; California; February 28.
Florida; Georgia; Louisiana; Mississippi;
Nevada; North Carolina; South Carolina; El
Paso, Hudspeth, Culberson, Reeves, Loving,
Winkler, Ector, Upton, Reagon, Sterling,
Coke, Tom Green, Concho, McCulloch, San Saba,
Mills, Hamilton, Bosque, Johnson, Tarrant,
Wise, and Cooke Counties, Texas, and all
Texas counties lying south and east thereof
to and including Terrell, Crocket, Sutton,
Kimble, Gillespie, Blanco, Comal, Guadalupe,
Gonzales, De Witt, Lavaca, Colorado, Wharton,
Matagorda Counties, Texas..
All other Texas counties and all other States. March 15.
------------------------------------------------------------------------
5. Insured Crop
In accordance with section 8 (Insured Crop) of the Basic Provisions
(Sec. 457.8), the crop insured will be all the cotton lint, in the
county for which premium rates are provided by the actuarial documents:
(a) In which you have a share; and
(b) That is not (unless allowed by the Special Provisions or by
written agreement):
(1) Colored cotton lint;
(2) Planted into an established grass or legume;
(3) Interplanted with another spring planted crop;
(4) Grown on acreage from which a hay crop was harvested in the same
calendar year unless the acreage is irrigated; or
(5) Grown on acreage on which a small grain crop reached the heading
stage in the same calendar year unless the acreage is irrigated or
adequate measures are taken to terminate the small grain crop prior to
heading and less than fifty percent (50%) of the small grain plants
reach the heading stage.
6. Insurable Acreage
In addition to the provisions of section 9 (Insurable Acreage) of
the Basic Provisions (Sec. 457.8):
[[Page 143]]
(a) The acreage insured will be only the land occupied by the rows
of cotton when a skip row planting pattern is utilized; and
(b) Any acreage of the insured crop damaged before the final
planting date, to the extent that a majority of the producers in the
area would not normally further care for the crop, must be replanted
unless we agree that it is not practical to replant.
7. Insurance Period
(a) In lieu of section 11(b)(2) of the Basic Provisions, insurance
will end upon the removal of the cotton from the field.
(b) In accordance with the provisions under section 11 (Insurance
Period) of the Basic Provisions (Sec. 457.8), the calendar date for the
end of the insurance period is the date immediately following planting
as follows:
(1) September 30 in Val Verde, Edwards, Kerr, Kendall, Bexar,
Wilson, Karnes, Goliad, Victoria, and Jackson Counties, Texas, and all
Texas counties lying south thereof;
(2) January 31 in Arizona, California, New Mexico, Oklahoma, and all
other Texas counties; and
(3) December 31 in all other states.
8. Causes of Loss
In accordance with the provisions of section 12 (Causes of Loss) of
the Basic Provisions (Sec. 457.8), insurance is provided only against
the following causes of loss which occur within the insurance period:
(a) Adverse weather conditions;
(b) Fire;
(c) Insects, but not damage due to insufficient or improper
application of pest control measures;
(d) Plant disease, but not damage due to insufficient or improper
application of disease control meaures;
(e) Wildlife;
(f) Earthquake;
(g) Volcanic eruption; or
(h) Failure of the irrigation water supply, if applicable, due to an
unavoidable cause of loss occurring within the insurance period.
9. Duties in the Event of Damage or Loss
(a) In addition to your duties under section 14 (Duties in the Event
of Damage or Loss) of the Basic Provisions (Sec. 457.8), in the event
of damage or loss:
(1) The cotton stalks must remain intact for our inspection; and
(2) If you initially discover damage to the insured crop within 15
days of harvest, or during harvest, you must leave representative
samples of the unharvested crop in the field for our inspection. The
samples must be at least 10 feet wide and extend the entire length of
each field in the unit.
(b) The stalks must not be destroyed, and required samples must not
be harvested, until the earlier of our inspection or 15 days after
harvest of the balance of the unit is completed and written notice of
probable loss given to us.
10. Settlement of Claim
(a) We will determine your loss on a unit basis. In the event you
are unable to provide records of production:
(1) For any optional unit, we will combine all optional units for
which acceptable records of production were not provided; or
(2) For any basic unit, we will allocate any commingled production
to such units in proportion to our liability on the harvested acreage
for each unit.
(b) In the event of loss or damage covered by this policy, we will
settle your claim on any unit by:
(1) Multiplying the insured acreage by the production guarantee;
(2) Subtracting from this the total production to count;
(3) Multiplying the remainder by your price election; and
(4) Multiplying this result by your share.
(c) The total production (pounds) to count from all insurable
acreage on the unit will include:
(1) All appraised production as follows:
(i) Not less than the production guarantee for acreage;
(A) That is abandoned;
(B) Put to another use without our consent;
(C) Damaged solely by uninsured causes;
(D) For which you fail to provide records of production that are
acceptable to us; or
(E) On which the cotton stalks are destroyed, in violation of
section 9;
(ii) Production lost due to uninsured causes;
(iii) Unharvested production (mature unharvested production of white
cotton may be adjusted for quality deficiencies in accordance with
subsection 10(d)); and
(iv) Potential production on insured acreage you want to put to
another use or you wish to abandon or no longer care for, if you and we
agree on the appraised amount of production. Upon such agreement, the
insurance period for that acreage will end if you put the acreage to
another use or abandon the crop. If agreement on the appraised amount of
production is not reached:
(A) If you do not elect to continue to care for the crop we may give
you consent to put the acreage to another use if you agree to leave
intact, and provide sufficient care for, representative samples of the
crop in locations acceptable to us (The amount of production to count
for such acreage will be based on the harvested production of appraisals
from the samples at the time harvest should have occurred. If you do not
leave the required samples intact, or you fail to provide sufficient
care for the samples,
[[Page 144]]
our appraisal made prior to giving you consent to put the acreage to
another use will be used to determine the amount of production to
count); or
(B) If you elect to continue to care for the crop, the amount of
production to count for the acreage will be the harvested production, or
our reappraisal if additional damage occurs and the crop is not
harvested; and
(2) All harvested production from the insurable acreage, including
any mature cotton retrieved from the ground.
(d) Mature white cotton may be adjusted for quality when production
has been damaged by insured causes. Such production to count will be
reduced if the price quotation for cotton of like quality (price
quotation ``A'') for the applicable growth area is less than seventy-
five percent (75%) of price quotation ``B.'' Price quotation ``B'' is
defined as the price quotation for the applicable growth area for cotton
of the color and leaf grade, staple length, and micronaire reading
designated in the Special Provisions for this purpose. Price quotations
``A'' and ``B'' will be the price quotations contained in the Daily Spot
Cotton Quotations published by the USDA Agricultural Marketing Service
on the date the last bale from the unit is classed. If the date the last
bale classed is not available, the price quotations will be determined
on the date the last bale from the unit is delivered to the warehouse,
as shown on the producer's account summary obtained from the gin. If
eligible for adjustment, the amount of production to be counted will be
determined by multiplying the number of pounds of such production by the
factor derived from dividing price quotation ``A'' by seventy-five
percent (75%) of price quotation ``B.''
(e) Colored cotton lint will not be eligible for quality adjustment.
11. Prevented Planting
(a) In addition to the provisions contained in section 17 of the
Basic Provisions, your prevented planting production guarantee will be
based on your approved yield without adjustment for skip-row planting
patterns.
(b) Your prevented planting coverage will be 50 percent of your
production guarantee for timely planted acreage. If you have limited or
additional levels of coverage, as specified in 7 CFR part 400, subpart
T, and pay an additional premium, you may increase your prevented
planting coverage to a level specified in the actuarial documents.
[59 FR 49154, Sept. 27, 1994, as amended at 60 FR 62725, Dec. 7, 1995;
62 FR 7134, Feb. 18, 1997; 62 FR 63633, Dec. 2, 1997; 62 FR 65164, Dec.
10, 1997; 63 FR 55497, Oct. 16, 1998; 63 FR 66717, Dec. 3, 1998]
Sec. 457.105 Extra long staple cotton crop insurance provisions.
The extra long staple cotton crop insurance provisions for the 1998
and succeeding crop years are as follows:
United States Department of Agriculture
Federal Crop Insurance Corporation
ELS Cotton Crop Provisions
If a conflict exists among the policy provisions, the order of
priority is as follows: (1) The Catastrophic Risk Protection
Endorsement; (2) the Special Provisions; (3) these Crop Provisions; (4)
the Basic Provisions with (1) controlling (2), etc.
1. Definitions
Cotton--Varieties identified as Extra Long Staple (ELS) cotton and
American Upland (AUP) cotton if ELS cotton is destroyed by an insured
cause and acreage is replanted to AUP cotton.
ELS cotton--Extra Long Staple cotton (also called Pima cotton,
American-Egyptian cotton, and American Pima cotton).
Harvest--The removal of the seed cotton from the open cotton boll,
or the severance of the open cotton boll from the stalk by either manual
or mechanical means.
Mature ELS cotton--ELS cotton that can be harvested either manually
or mechanically.
Planted acreage--In addition to the definition contained in the
Basic Provisions, cotton must be planted in rows, unless otherwise
provided by the Special Provisions, actuarial documents, or by written
agreement. The yield conversion factor normally applied to non-irrigated
skip-row cotton acreage will not be used if the land between the rows of
cotton is planted to any other spring planted crop.
Production guarantee-- The number of pounds determined by
multiplying the approved yield per acre by any applicable yield
conversion factor for non-irrigated skip-row planting patterns, and
multiplying the result by the coverage level percentage you elect.
Replanting-- Performing the cultural practices necessary to replace
the ELS cotton seed, and replacing the seed with either ELS or AUP
cotton seed in the insured acreage with the expectation of growing a
successful crop.
Skip-row-- A planting pattern that:
(1) Consists of alternating rows of cotton and fallow land or land
planted to another crop the previous fall; and
(2) Qualifies as a skip-row planting pattern as defined by the Farm
Service Agency (FSA) or a successor agency.
[[Page 145]]
2. Insurance Guarantees, Coverage Levels, and Prices for Determining
Indemnities
In addition to the requirements of section 3 (Insurance Guarantees,
Coverage Levels, and Prices for Determining Indemnities) of the Basic
Provisions (Sec. 457.8) you may select only one price election for all
the cotton in the county insured under this policy.
3. Contract Changes
The contract change date is November 30 (December 17 for the 1998
crop year only) preceding the cancellation date (see the provisions of
section 4 (Contract Changes) of the Basic Provisions).
4. Cancellation and Termination Dates
In accordance with section 2 (Life of Policy, Cancellation, and
Termination) of the Basic Provisions (Sec. 457.8), the cancellation and
termination dates are:
------------------------------------------------------------------------
Cancellation and termination
States dates
------------------------------------------------------------------------
New Mexico................................ March 15.
All other States.......................... Feb. 28.
------------------------------------------------------------------------
5. Insured Crop
In accordance with section 8 (Insured Crop) of the Basic Provisions
(Sec. 457.8), the crop insured will be all the cotton lint in the
county for which premium rates are provided by the actuarial documents:
(a) In which you have a share; and
(b) That is not (unless allowed by the Special Provisions or by a
written agreement):
(1) Planted into an established grass or legume;
(2) Interplanted with another spring planted crop;
(3) Grown on acreage from which a hay crop was harvested in the same
calendar year unless the acreage is irrigated; or
(4) Grown on acreage on which a small grain crop reached the heading
stage in the same calendar year unless the acreage is irrigated or
adequate measures are taken to terminate the small grain crop prior to
heading and less than fifty percent (50%) of the small grain plants
reach the heading stage.
6. Insurable Acreage
In addition to the provisions of section 9 (Insurable Acreage) of
the Basic Provisions (Sec. 457.8):
(a) The acreage insured will be only the land occupied by the rows
of cotton when a skip row planting pattern is utilized; and
(b) Any acreage of the insured crop damaged before the final
planting date, to the extent that a majority of producers in the area
would not be replanted unless we agree that it is not practical to
replant.
7. Insurance Period
(a) In lieu of section 11(b)(b)(2) of the Basic Provisions,
insurance will end upon the removal of the cotton from the field.
(b) In accordance with the provisions of section 11 (Insurance
Period) of the Basic Provisions (Sec. 457.8), the calendar date for the
end of the insurance period is January 31 immediately following
planting.
8. Causes of Loss
In accordance with the provisions of section 12 (Causes of Loss) of
the Basic Provisions (Sec. 457.8), insurance is provided only against
the following causes of loss which occur within the insurance period:
(a) Adverse weather conditions;
(b) Fire;
(c) Insects, but not damage due to insufficient or improper
application of pest control measures;
(d) Plant disease, but not damage due to insufficient or improper
application of disease control measures;
(e) Wildlife;
(f) Earthquake;
(g) Volcanic eruption; or
(h) Failure of irrigation water supply, if applicable, due to an
unavoidable cause of loss occurring within the insurance period.
9. Duties in the Event of Damage or Loss
(a) In addition to your duties under section 14 (Duties in the Event
of Damage or Loss) of the Basic Provisions (Sec. 457.8), in the event
of damage or loss:
(1) You must give us notice if you intend to replant any acreage
originally planted to ELS cotton to AUP cotton;
(2) The cotton stalks must remain intact for our inspection; and
(3) If you initially discover damage to any insured crop within 15
days of harvest, or during harvest, you must leave representative
samples of the unharvested crop for our inspection. The samples must be
at least 10 feet wide and extend the entire length of the field in the
unit.
(b) The stalks must not be destroyed, and required samples must not
be harvested, until the earlier of our inspection or 15 days after
harvest of the balance of the unit is completed and written notice of
probable loss is given to us.
10. Settlement of Claim
(a) We will determine your loss on a unit basis. In the event you
are unable to provide records of production:
(1) For any optional unit, we will combine all optional units for
which acceptable records of production were not provided; or
(2) For any basic unit, we will allocate any commingled production
to such units in proportion to our liability on the harvested acreage
for each unit.
[[Page 146]]
(b) In the event of loss or damage covered by this policy, we will
settle your claim on any unit by:
(1) Multiplying the insured acreage by the production guarantee;
(2) Subtracting from this the total production to count;
(3) Multiplying the remainder by your price election; and
(4) Multiplying this result by your share.
(c) The total production (pounds) to count from all insurable
acreage on the unit will include:
(1) All appraised production as follows:
(i) Not less than the production guarantee for acreage:
(A) That is abandoned;
(B) Put to another use without our consent;
(C) Damaged solely by uninsured causes;
(D) For which you fail to provide records of production that are
acceptable to us; or
(E) On which the cotton stalks are destroyed in violation of section
9;
(ii) Production lost due to uninsured causes;
(iii) Unharvested production (mature unharvested production may be
adjusted for quality deficiencies in accordance with subsection:
(A) 10(d) and (e) if it is mature ELS cotton; or
(B) 10(f) if it is AUP cotton insured under these crop provisions);
and
(iv) Potential production on insured acreage you want to put to
another use or you wish to abandon or no longer care for, if you and we
agree on the appraised amount of production. Upon such agreement the
insurance period for that acreage will end if you put the acreage to
another use or abandon the crop. If agreement on the appraised amount of
production is not reached:
(A) If you do not elect to continue to care for the crop, we may
give you consent to put the acreage to another use if you agree to leave
intact, and provide sufficient care for, representative samples of the
crop in locations acceptable to us (The amount of production to count
for such acreage will be based on the harvested production or appraisals
from the samples at the time harvest should have occurred. If you do not
leave the required samples intact, or you fail to provided sufficient
care for the samples, our appraisal made prior to giving you consent to
put the acreage to another use will be used to determine the amount of
production to count.); or
(B) If you elect to continue to care for the crop, the amount of
production to count for the acreage will be the harvested production, or
our reappraisal if additional damage occurs and the crop is not
harvested; and
(2) All harvested production from the insurable acreage, including
any mature cotton retrieved from the ground.
(d) Mature ELS cotton production may be adjusted for quality when
production has been damaged by insured causes. Such production to count
will be reduced if the price quotation for ELS cotton of like quality
(price quotation ``A'') for the applicable growth area is less than 75
percent of price quotation ``B.'' Price quotation ``B'' is defined as
the price quotation for the applicable growth area for ELS cotton of the
grade, staple length, and micronaire reading designated in the Special
Provisions for this purpose. Price quotations ``A'' and ``B'' will be
the price quotations contained in the Daily Spot Cotton Quotations
published by the USDA Agricultural Marketing Service on the date the
last bale from the unit is classed. If the date the last bale is classed
is not available, the price quotations will be determined when the last
bale from the unit is delivered to the warehouse, as shown on the
producers account summary obtained from the gin. If eligible for quality
adjustment, the amount of production to be counted will be determined by
multiplying the number of pounds of such production by the factor
derived from dividing price quotation ``A'' by 75 percent of price
quotation ``B.''
(e) For ELS cotton to be eligible for quality adjustment as shown in
subsection 10(d), ginning must have been completed at a gin using roller
equipment.
(f) Any AUP cotton harvested or appraised from the acreage
originally planted to ELS cotton in the same growing season will be
reduced by the factor obtained by dividing the price per pound of the
AUP cotton by the price quotation for the ELS cotton of the grade,
staple length, and micronaire reading designated in the Special
Provisions for this purpose. The prices used for the AUP and ELS cotton
will be the price quotations contained in the Daily Spot Cotton
Quotations published by the USDA Agricultural Marketing Service on the
date the last bale from the unit is classed. If the date the last bale
is classed is not available, the price quotations will be determined
when the last bale from the unit is delivered to the warehouse, as shown
on the producer's account summary obtained from the gin. If either price
quotation is unavailable for the dates stated above, the price
quotations for the nearest prior date for which price quotations for
both the AUP and ELS cotton are available will be used. If prices are
not yet available for the insured crop year, the previous season's
average prices will be used.
11. Late Planting
A late planting period is not applicable to ELS cotton. Any ELS
cotton that is planted after the final planting date will not be insured
unless you were prevented from planting it by the final planting date.
Such acreage will be insurable, and the production
[[Page 147]]
guarantee and premium for the acreage will be determined in accordance
with section 16 of the Basic Provisions.
12. Prevented Planting
(a) In addition to the provisions contained in section 17 of the
Basic Provisions, your prevented planting production guarantee will be
based on your approved yield without adjustment for skip-row planting
patterns.
(b) Your prevented planting coverage will be 50 percent of your
production guarantee for timely planted acreage. If you have limited or
additional levels of coverage, as specified in 7 CFR part 400, subpart
T, and pay an additional premium, you may increase your prevented
planting coverage to a level specified in the actuarial documents.
[59 FR 49169, Sept. 27, 1994, as amended at 60 FR 62726, Dec. 7, 1995;
62 FR 6704, Feb. 13, 1997; 62 FR 63633, Dec. 2, 1997; 62 FR 65165, Dec.
10, 1997; 63 FR 55497, Oct. 16, 1998; 63 FR 66717, Dec. 3, 1998]
Sec. 457.106 Texas citrus tree crop insurance provisions.
The Texas Citrus Tree Crop Insurance Provisions for the 1999 and
succeeding crop years are as follows:
United States Department of Agriculture
Federal Crop Insurance Corporation
Reinsured policies
(Appropriate title for insurance provider)
Both FCIC and Reinsured Policies
Texas Citrus Tree Crop Provisions
If a conflict exists among the policy provisions, the order of
priority is as follows: (1) The Catastrophic Risk Protection
Endorsement, if applicable; (2) the Special Provisions; (3) these Crop
Provisions; and (4) the Basic Provisions with (1) controlling (2), etc.
1. Definitions
Bud union--The location on the tree trunk where a bud from one tree
variety is grafted onto root stock of another variety.
Crop--Specific groups of citrus fruit trees as listed in the Special
Provisions.
Crop year--For the 1998 crop year only, a period of time that begins
on June 1, 1997, and ends on November 20, 1998. For all other crop
years, a period of time that begins on November 21 of the calendar year
prior to the year the trees normally bloom, and ends on November 20 of
the following calendar year. The crop year is designated by the year in
which the insurance period ends.
Dehorning--Cutting all scaffold limbs to a length not longer than
\1/4\ the height of the tree before such cutting.
Destroyed--Trees damaged to the extent that removal is necessary.
Excess precipitation--An amount of precipitation sufficient to
directly damage the tree.
Excess wind--A natural movement of air that has sustained speeds in
excess of 58 miles per hour recorded at the U.S. Weather Service
reporting station nearest to the crop at the time of crop damage.
Freeze--The formation of ice in the cells of the trees caused by low
air temperatures.
Good farming practices--The cultural practices generally in use in
the county for the trees to have normal growth and vigor and recognized
by the Cooperative State Research, Education, and Extension Service as
compatible with agronomic and weather conditions in the county.
Interplanted--Acreage on which two or more crops are planted in any
form of alternating or mixed pattern.
Irrigated practice--A method by which the normal growth and vigor of
the insured trees is maintained by artificially applying adequate
quantities of water during the growing season using the appropriate
irrigation systems at the proper times.
Root stock--A root or a piece of a root of one tree variety onto
which a bud from another tree variety is grafted.
Scaffold limbs--Major limbs attached directly to the trunk.
Set out--Transplanting the tree into the grove.
2. Unit Division
(a) A basic unit, as defined in section 1 of the Basic Provisions,
will be divided into additional basic units by each citrus crop
designated in the Special Provisions.
(b) Sections 34(a) (1), (3), and (4) of the Basic Provisions are not
applicable.
(c) Provisions in the Basic Provisions that allow optional units by
irrigated and non-irrigated practices are not applicable.
(d)Instead of establishing optional units by section, section
equivalent, or FSA farm serial number optional units may be established
if each optional unit is located on non-contiguous land.
3. Insurance Guarantees, Coverage Levels, and Prices for Determining
Indemnities
(a) In lieu of the requirement of section 3 (Insurance Guarantees,
Coverage Levels, and Prices for Determining Indemnities) of the Basic
Provisions (Sec. 457.8), that prohibits you from selecting more than
one coverage level for each insured crop, you may select a different
coverage level for each crop designated in the Special Provisions that
you elect to insure.
(b) In addition to the requirements of section 3 (Insurance
Guarantees, Coverage Levels, and Prices for Determining Indemnities) of
the Basic Provisions (Sec. 457.8):
[[Page 148]]
(1) If you insure trees within a crop which are either of a
different variety or are planted at a different population density, the
per acre amount of insurance for each variety or population density for
the crop must bear the same relationship to the maximum amount of
insurance available for each variety and population density of the crop
as specified in the Actuarial documents. For example, if you elect 100
percent of the maximum amount of insurance for a variety within a
population density for the crop, you must select 100 percent of the
maximum amount of insurance for that variety for all population
densities for the crop. The amount of insurance for each variety and
population density must be multiplied by any applicable factor contained
in section 3(b)(2).
(2) The amount of insurance per acre will be the product obtained by
multiplying the reference maximum dollar amount of insurance that is
shown in the actuarial documents for the applicable population density
by the percentage for the level of coverage you select and by:
(i) Thirty-three percent (0.33) for the year of set out, the year
following dehorning, or the year following grafting of a set out tree.
(Insurance will be limited to this amount until trees that are set out
are one year of age or older on the first day of the crop year);
(ii) Sixty percent (0.60) for the first growing season after being
set out, the second year following dehorning, or the second year
following grafting of a set out tree;
(iii) Eighty percent (0.80) for the second growing season after
being set out, the third year following dehorning, or the third year
following grafting of a set out tree; or
(iv) Ninety percent (0.90) for the third growing season after being
set out, the fourth year following dehorning, or the fourth year
following grafting of a set out tree.
(3) The amount of insurance per acre for each population density, or
factor as appropriate, will be multiplied by the applicable number of
insured acres. These results will then be added together to determine
the amount of insurance for the unit.
(4) The amount of insurance will be reduced proportionately for any
unit on which the stand is less than 90 percent, based on the original
planting pattern. For example, if the amount of insurance you selected
is $2,000 and the remaining stand is 85 percent of the original stand,
the amount of insurance on which the premium and any indemnity will be
based is $1,700 ($2,000 multiplied by 0.85).
(5) If any insurable acreage of trees is set out after the first day
of the crop year, and you elect to insure such acreage during that crop
year, you must report the acreage, practice, crop, number of trees, date
set out is completed, and your share to us within 72 hours after set out
is completed for the unit.
(6) Production reporting requirements contained in section 3
(Insurance Guarantees, Coverage Levels, and Prices for Determining
Indemnities) of the Basic Provisions (Sec. 457.8), are not applicable.
(7) You must report, by the sales closing date contained in the
Special Provisions, by type if applicable:
(i) Any damage, removal of trees, change in practices, or any other
circumstance that may reduce the amount of insurance, and the number of
affected acres;
(ii) The number of trees on insurable and uninsurable acreage;
(iii) The date of original set out and the planting pattern;
(iv) The date of replacement or dehorning, if more than 10 percent
of the trees on any unit have been replaced or dehorned in the previous
5 years; and
(v) For the first year of insurance for acreage interplanted with
another perennial crop, and anytime the planting pattern of such acreage
is changed:
(A) The age of the interplanted crop, and type if applicable;
(B) The planting pattern; and
(C) Any other information that we request in order to establish your
amount of insurance.
We will reduce the amount of insurance as necessary, based on our
estimate of the effect of interplanting a perennial crop; removal of
trees; damage; change in practices and any other circumstance on the
potential of the insured crop. If you fail to notify us of any
circumstance that may reduce the potential for the insured crop, we will
reduce your amount of insurance as necessary at any time we become aware
of the circumstance.
4. Contract Changes
In accordance with section 4 (Contract Changes) of the Basic
Provisions (Sec. 457.8), the contract change date is August 31
preceding the cancellation date.
5. Cancellation and Termination Dates
In accordance with section 2 (Life of Policy, Cancellation, and
Termination) of the Basic Provisions (Sec. 457.8), the cancellation and
termination dates are November 20.
6. Annual Premium
In addition to the provisions of section 5 (Annual Premium) of the
Basic Provisions (Sec. 457.8), for the 1998 crop year, the premium
amount otherwise payable for the 1998 crop year will be increased by 46
percent as a result of the additional six months of coverage for that
crop year.
[[Page 149]]
7. Insured Crop
(a) In accordance with section 8 (Insured Crop) of the Basic
Provisions (Sec. 457.8), the crop insured will be all of each citrus
tree crop designated in the Special Provisions in the county for which a
premium rate is provided by the actuarial documents and that you elect
to insure:
(1) In which you have an ownership share;
(2) That is adapted to the area;
(3) That is set out for the purpose of growing fruit to be harvested
for the commercial production of fresh fruit or for juice;
(4) That is irrigated; and
(5) That have the potential to produce at least 70 percent of the
county average yield for the crop and age, unless a written agreement is
approved to insure the trees with lesser potential.
(b) In addition to section 8 (Insured Crop) of the Basic Provisions
(Sec. 457.8), we do not insure any citrus trees:
(1) During the crop year the application for insurance is filed,
unless we inspect the acreage and consider it acceptable; or
(2) That have been grafted onto existing root stock or nursery stock
within the one-year period prior to the date insurance attaches.
(c) We may exclude from insurance or limit the amount of insurance
on any acreage that was not insured the previous year.
8. Insurable Acreage
In lieu of the provisions in section 9 (Insurable Acreage) of the
Basic Provisions (Sec. 457.8), that prohibit insurance attaching to a
crop planted with another crop, citrus trees interplanted with another
perennial crop are insurable, unless we inspect the acreage and
determine that it does not meet the requirements contained in your
policy.
9. Insurance Period
In lieu of the provisions of section 11 (Insurance Period) of the
Basic Provisions (Sec. 457.8):
(a) The insurance period is as follows:
(1) For the 1998 crop year only, coverage will begin on June 1,
1997, and will end on November 20, 1998.
(2) For all subsequent crop years, coverage begins on November 21 of
the calendar year prior to the year the insured crop normally blooms,
except that for the year of application, if your application is received
after November 11 but prior to November 21, insurance will attach on the
10th day after your properly completed application is received in our
local office, unless we inspect the acreage during the 10 day period and
determine that it does not meet the requirements for insurability
contained in your policy. You must provide any information that we
require for the crop or to determine the condition of the grove.
(3) The calendar date for the end of the insurance period for each
crop year is November 20.
(b) If you acquire an insurable share in any insurable acreage after
coverage begins but on or before the acreage reporting date for the crop
year, and after an inspection we consider the acreage acceptable,
insurance will be considered to have attached to such acreage on the
calendar date for the beginning of the insurance period.
(c) If you relinquish your insurable share on any insurable acreage
of citrus trees on or before the acreage reporting date for the crop
year, insurance will not be considered to have attached to and no
premium or indemnity will be due for such acreage for that crop year
unless:
(1) A transfer of coverage and right to an indemnity, or a similar
form approved by us, is completed by all affected parties;
(2) We are notified by you or the transferee in writing of such
transfer on or before the acreage reporting date; and
(3) The transferee is eligible for crop insurance.
10. Causes of Loss
In accordance with the provisions of section 12 (Causes of Loss) of
the Basic Provisions (Sec. 457.8), insurance is provided only against
the following causes of loss that occur within the insurance period:
(a) Excess precipitation;
(b) Excess wind;
(c) Fire, unless weeds and other forms of undergrowth have not been
controlled or pruning debris has not been removed from the grove;
(d) Freeze;
(e) Hail;
(f) Tornado; or
(g) Failure of the irrigation water supply if caused by an insured
peril or drought that occurs during the insurance period.
11. Duties in the Event of Damage or Loss
In addition to the requirements of section 14 (Duties in the Event
of Damage or Loss) of the Basic Provisions (Sec. 457.8), in case of
damage or probable loss, if you intend to claim an indemnity on any
unit, you must allow us to inspect all insured acreage before pruning,
dehorning, or removal of any damaged trees.
12. Settlement of Claim
(a) In the event of damage covered by this policy, we will settle
your claim on a unit basis by:
(1) Determining the actual percent of damage for the unit in
accordance with sections 12 (b), (c), and (d);
(2) Subtracting your deductible from the percent of damage for the
unit (this result must be greater than zero to receive an indemnity);
[[Page 150]]
(3) Dividing the result of section 12(a)(2) by your coverage level
percentage;
(4) Multiplying the result of section 12(a)(3) by the amount of
insurance per acre determined in accordance with section 3(b)(2);
(5) Multiplying the result of section 12(a)(4) by the number of
insured acres; and
(6) Multiplying the result of section 12(a)(5) by your share.
(b) The percent of damage for any tree will be determined as
follows:
(1) For damage occurring during the year of set out (trees that have
not been set out for at least one year at the time insurance attaches):
(i) One-hundred percent (100%) whenever there is no live wood above
the bud union;
(ii) Ninety percent (90%) whenever there is less than 12 inches of
live wood above the bud union; or
(iii) The tree will be considered undamaged whenever there is more
than 12 inches of live wood above the bud union; or
(2) For damage occurring in any year following the year of set out:
(i) The percentage of damage will be determined by dividing the
number of scaffold limbs damaged in an area from the trunk to a length
equal to one-fourth (\1/4\) the height of the tree, by the total number
of scaffold limbs before damage occurred. Whenever this percentage
exceeds 80 percent, the tree will be considered as 100 percent damaged.
(ii) The percent of damage for the unit will be determined by
computing the average of the determinations made for the individual
trees. If this percent of damage exceeds 80 percent, the unit will be
considered 100 percent damaged.
(c) The percent of damage on the unit will be reduced by the
percentage of damage due to uninsured causes.
13. Late and Prevented Planting
The late and prevented planting provisions of the Basic Provisions
are not applicable.
[62 FR 4117, Jan. 29, 1997, as amended at 62 FR 65166, Dec. 10, 1997; 63
FR 55779, Oct. 19, 1998]
Sec. 457.107 Florida citrus fruit crop insurance provisions.
The Florida citrus fruit crop insurance provisions for the 1999 and
succeeding crop years are as follows:
Department of Agriculture
Federal Crop Insurance Corporation
Florida Citrus Fruit Crop Provisions
If a conflict exists among the policy provisions, the order of
priority is as follows: (1) The Catastrophic Risk Protection
Endorsement, if applicable; (2) the Special Provisions; (3) these Crop
Provisions; and (4) the Basic Provisions with (1) controlling (2), etc.
1. Definitions
Amount of insurance (acre). The dollar amount determined by
multiplying the Reference Maximum Dollar Amount shown on the actuarial
documents for the citrus fruit times the coverage level you elect, times
your share.
Box. A standard field box as prescribed in the State of Florida
Citrus Fruit Laws.
Citrus fruit type. Any of the following:
(1) Type I--Early and mid-season oranges;
(2) Type II--Late oranges juice;
(3) Type III--Grapefruit for which freeze damage will be adjusted on
a juice basis;
(4) Type IV--Navel Oranges, Tangelos and Tangerines;
(5) Type V--Murcott Honey Oranges (also known as Honey Tangerines)
and Temple Oranges;
(6) Type VI--Lemons and Limes; and
(7) Type VII--Grapefruit for which freeze damage will be adjusted on
a fresh fruit basis, and late oranges fresh.
Freeze. The formation of ice in the cells of the fruit caused by low
air temperatures.
Good farming practices. The cultural practices generally in use in
the county for the crop to make normal progress toward maturity and
produce the expected yield for the type and age of citrus fruit, and are
those recognized by the Cooperative State Research, Education, and
Extension Service as compatible with agronomic and weather conditions in
the county.
Harvest. The severance of mature citrus fruit from the tree by
pulling, picking, or any other means, or collecting the marketable fruit
from the ground.
Hurricane. A windstorm classified by the U.S. Weather Service as a
hurricane.
Interplanted. Acreage on which two or more crops are planted in any
form of alternating or mixed pattern.
Potential production. Citrus fruit that would have been produced had
damage not occurred, including citrus fruit that:
(1) Was harvested before damage occurred;
(2) Remained on the tree after damage occurred; and
(3) Was lost from either an insured or uninsured cause;
But not including citrus fruit that:
(1) Was lost before insurance attached for any crop year;
(2) Was lost by normal dropping; or
(3) Any tangerines that normally would not meet the 210 pack size (2
and 4/16 inch minimum diameter) under United States Standards by the end
of the insurance period for tangerines.
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2. Unit Division
(a) A basic unit, as defined in section 1 of the Basic Provisions,
will be divided into additional basic units by each citrus crop
designated in the Special Provisions.
(b) Provisions in the Basic Provisions that allow optional units by
irrigated and non-irrigated practices are not applicable.
(c)Instead of establishing optional units by section, section
equivalent, or FSA farm serial number, optional units may be established
if each optional unit is located on non-contiguous land.
3. Insurance Guarantees, Coverage Levels, and Prices for Determining
Indemnities
In addition to the requirements of section 3 (Insurance Guarantees,
Coverage Levels, and Prices for Determining Indemnities) of the Basic
Provisions (Sec. 457.8):
(a) You may select only one coverage level for each Florida citrus
fruit type shown in section 1 of these crop provisions or designated in
the Special Provisions, that you elect to insure. If different amounts
of insurance are available for citrus fruit within a type, you must
select the same coverage level for each citrus fruit. For example, if
you choose the 75 percent coverage level for a specific citrus fruit
within a type, you must also choose the 75 percent coverage level for
all other citrus fruit within that type.
(b) In lieu of the production reporting date contained in section 3
(Insurance Guarantees, Coverage Levels, and Prices for Determining
Indemnities) of the Basic Provisions (Sec. 457.8), potential production
for each unit will be determined during loss adjustment.
(c) By the sales closing date contained in the Special Provisions,
for the first year of insurance for acreage interplanted with another
citrus fruit crop, and anytime the planting pattern of such acreage is
changed, you must report the following:
(1) The age of the interplanted trees and type if applicable;
(2) The planting pattern; and
(3) Any other information we request in order to establish your
amount of insurance.
(d) We will reduce acreage or the amount of insurance or both, as
necessary, based on our estimate of the effect of the interplanted
citrus fruit trees on the insured citrus fruit crop. If you fail to
notify us of any circumstance that may reduce the acreage or amount of
insurance, we will reduce the acreage or amount of insurance or both as
necessary any time we become aware of the circumstance.
4. Contract Changes
In accordance with section 4 (Contract Changes) of the Basic
Provisions (Sec. 457.8), the contract change date is March 15 preceding
the cancellation date.
5. Cancellation and Termination Dates
In accordance with section 2 (Life of Policy, Cancellation, and
Termination) of the Basic Provisions (Sec. 457.8), the cancellation
date is April 30 preceding the crop year. The termination date is April
30 of the crop year.
6. Insured Crop
(a) In accordance with section 8 (Insured Crop) of the Basic
Provisions (Sec. 457.8), the crop insured will be all acreage of each
citrus fruit type that you elect to insure, in which you have a share,
that is grown in the county shown on the application, and for which a
premium rate is quoted in the actuarial documents.
(b) In addition to the citrus fruit not insurable in section 8
(Insured Crop) of the Basic Provisions (Sec. 457.8), we do not insure
any citrus fruit:
(1) That cannot be expected to mature each crop year within the
normal maturity period for the type;
(2) Produced by trees that have not reached the fifth growing season
after being set out, unless otherwise provided in the Special Provisions
or by a written agreement to insure such citrus fruit;
(3) Of ``Meyer Lemons'' and oranges commonly known as ``Sour
Oranges'' or ``Clementines''; or
(4) Of the Robinson tangerine variety, for any crop year in which
you have elected to exclude such tangerines from insurance. (You must
elect this exclusion prior to the crop year for which the exclusion is
to be effective, except that for the first crop year you must elect this
exclusion by the later of April 30 or the time you submit the
application for insurance.)
(c) Upon our approval, prior to the date insurance attaches, you may
elect to insure or exclude from insurance any insurable acreage that has
a potential production of less than 100 boxes per acre. If you:
(1) Elect to insure such acreage, we will consider the potential
production to be 100 boxes per acre when determining the amount of loss;
or
(2) Elect to exclude such acreage, we will disregard the acreage for
all purposes related to this contract.
(d) In addition to the provisions in section 6 (Report of Acreage)
of the Basic Provisions (Sec. 457.8), if you fail to notify us of your
election to insure or exclude acreage, and the potential production from
such acreage is 100 or more boxes per acre, we will determine the
percent of damage on all of the insurable acreage for the unit, but will
not allow the percent of damage for the unit to be increased by
including such acreage.
7. Insurable Acreage
In lieu of the provisions in section 9 (Insurable Acreage) of the
Basic Provisions
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(Sec. 457.8), that prohibit insurance attaching to a crop planted with
another crop, citrus fruit interplanted with another citrus fruit crop
is insurable unless we inspect the acreage and determine that it does
not meet the requirements contained in your policy.
8. Insurance Period
(a) In accordance with the provisions of section 11 (Insurance
Period) of the Basic Provisions (Sec. 457.8):
(1) Coverage begins on May 1 of each crop year, except that for the
year of application if your application is received by us after April
21, but prior to May 1, insurance will attach on the 10th day after your
properly completed application, acreage, and production reports are
received in our local office, unless we inspect the acreage during the
10 day period and determine that it does not meet the requirements for
insurability contained in your policy. You must provide any information
that we require for the crop to determine the condition of the grove to
be insured.
(2) The calendar date for the end of the insurance period for each
crop year is:
(i) January 31 for tangerines and navel oranges;
(ii) April 30 for lemons, limes, tangelos, early and mid-season
oranges; and
(iii) June 30 for late oranges, grapefruit, Temple, and Murcott
Honey Oranges.
(b) In addition to the provisions of section 11 (Insurance Period)
of the Basic Provisions (Sec. 457.8):
(1) If you acquire an insurable share in any insurable acreage after
coverage begins, but on or before the acreage reporting date of any crop
year, and if after inspection we consider the acreage acceptable, then
insurance will be considered to have attached to such acreage on the
calendar date for the beginning of the insurance period.
(2) If you relinquish your insurable share on any insurable acreage
of citrus fruit on or before the acreage reporting date of any crop
year, insurance will not be considered to have attached to, no premium
will be due and no indemnity paid for, such acreage for that crop year
unless:
(i) A transfer of coverage and right to an indemnity, or a similar
form approved by us, is completed by all affected parties;
(ii) We are notified by you or the transferee in writing of such
transfer on or before the acreage reporting date; and
(iii) The transferee is eligible for crop insurance.
9. Causes of Loss
(a) In accordance with the provisions of section 12 (Causes of Loss)
of the Basic Provisions (Sec. 457.8), insurance is provided only
against the following causes of loss that occur within the insurance
period:
(1) Fire, unless weeds and other forms of undergrowth have not been
controlled or pruning debris has not been removed from the grove;
(2) Freeze;
(3) Hail;
(4) Hurricane; or
(5) Tornado.
(b) In addition to the causes of loss excluded in section 12 (Causes
of Loss) of the Basic Provisions (Sec. 457.8), we will not insure
against damage or loss of production due to:
(1) Any damage to the blossoms or trees; or
(2) Inability to market the citrus fruit for any reason other than
actual physical damage from an insurable cause specified in this
section. For example, we will not pay you an indemnity if you are unable
to market due to quarantine, boycott, or refusal of any person to accept
production.
10. Settlement of Claim
(a) We will determine your loss on a unit basis. In the event you
are unable to provide separate acceptable production records:
(1) For any optional units, we will combine all optional units for
which such production records were not provided; or
(2) For any basic units, we will allocate any commingled production
to such units in proportion to our liability on the harvested acreage
for the units.
(b) In the event of loss or damage covered by this policy, we will
settle your claim by:
(1) Calculating the amount of insurance for the unit by multiplying
the number of acres by the respective dollar amount of insurance per
acre for the citrus fruit and multiplying that result by your share;
(2) Calculating the average percent of damage to the respective
citrus fruit, rounded to the nearest tenth of a percent (0.1%). The
percent of damage will be the ratio of the number of boxes of citrus
fruit considered damaged from an insured cause divided by the undamaged
potential production. Citrus fruit will be considered undamaged
potential production if it is:
(i) Marketed or could be marketed as fresh fruit;
(ii) Harvested prior to inspection by us; or
(iii) Harvested within 7 days after a freeze;
(3) Subtracting the coverage level percentage from 100 percent;
(i) Subtracting this result from the result of section (10)(b)(2);
and
(ii) If the result section (10)(b)(3)(i) is positive, dividing this
result by the coverage level percentage;
(4) Multiplying the result of section (10)(b)(3)(ii) by the amount
of insurance for the unit for the respective citrus fruit.
(For example, if the average percent of damage is 70 percent and the
coverage level is 75 percent (the deductible is 25 percent), the amount
payable is 60 percent times the amount of insurance (70% damage - 25 %
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level deductible) = 45% (45% / 75%) 60% adjusted damage times the amount
of insurance); and
(5) Totaling all such results of section (10)(b)(4) to determine the
amount payable for the unit.
(c) Citrus fruit of Types IV, V, and VII that are seriously damaged
by freeze, as determined by a fresh-fruit cut of a representative sample
of fruit in the unit in accordance with the applicable provisions of the
State of Florida Citrus Fruit laws, and that are not or could not be
marketed as fresh fruit, will be considered damaged to the following
extent:
(1) If less than 16 percent of the fruit in a sample shows serious
freeze damage, the fruit will be considered undamaged; or
(2) If 16 percent or more of the fruit in a sample shows serious
freeze damage, the fruit will be considered 50 percent damaged, except
that:
(i) For tangerines of Type IV, damage in excess of 50 percent will
be the actual percent of damaged fruit; and
(ii) Citrus of Types IV (except tangerines), V, and VII, if it is
determined that the juice loss in the fruit exceeds 50 percent, such
percent will be considered the percent of damage.
(d) Notwithstanding the provisions of section 10(c) of these crop
provisions as to citrus fruit of Types IV, V, and VII, in any unit that
is mechanically separated using the specific-gravity (floatation) method
into undamaged and freeze-damaged fruit, the amount of damage will be
the actual percent of freeze-damaged fruit not to exceed 50 percent and
will not be affected by subsequent fresh-fruit marketing. However, the
50 percent limitation on mechanically-separated, freeze-damaged fruit
will not apply to tangerines of citrus fruit Type IV.
(e) Any citrus fruit of Types I, II, III, and VI damaged by freeze,
but that can be processed into products for human consumption, will be
considered as marketable for juice. The percent of damage will be
determined by relating the juice content of the damaged fruit to:
(1) The average juice content of the fruit produced on the unit for
the three previous crop years based on your records, if they are
acceptable to us; or
(2) The following juice content, if acceptable records are not
furnished:
(i) Type I--52 pounds of juice per box
(ii) Type II--54 pounds of juice per box
(iii) Type III--45 pounds of juice per box
(iv) Type VI--43 pounds of juice per box
(f) Any citrus fruit on the ground that is not collected and
marketed will be considered as 100 percent damaged if the damage was due
to an insured cause.
(g) Any citrus fruit that is unmarketable either as fresh fruit or
as juice because it is immature, unwholesome, decomposed, adulterated,
or otherwise unfit for human consumption due to an insured cause will be
considered as 100 percent damaged.
(h) Citrus fruit of Types IV, V, and VII that are unmarketable as
fresh fruit due to serious damage from hail as defined in the applicable
United States Standards for Grades of Florida fruit will be considered
totally lost.
11. Late and Prevented Planting
The late and prevented planting provisions of the Basic Provisions
are not applicable.
[61 FR 69002, Dec. 31, 1996, as amended at 62 FR 65166, Dec. 10, 1997]
Sec. 457.108 Sunflower seed crop insurance provisions.
The sunflower seed crop insurance provisions for the 2003 and
succeeding crop years are as follows:
Department of Agriculture
Federal Crop Insurance Corporation
Sunflower Seed Crop Provisions
If a conflict exists among the policy provisions, the order of
priority is as follows: (1) The Catastrophic Risk Protection
Endorsement, if applicable; (2) the Special Provisions; (3) these Crop
Provisions; and (4) the Basic Provisions with (1) controlling (2), etc.
1. Definitions
Harvest--Combining or threshing the sunflowers for seed.
Local market price--The cash seed price per pound for oil type
sunflower seed grading U.S. No. 2, or non-oil type sunflower seed with a
test weight of at least 22 pounds per bushel and less than five percent
(5%) kernel damage, offered by buyers in the area in which you normally
market the sunflower seed. The local market price for oil type sunflower
seed will reflect the maximum limits of quality deficiencies allowable
for the U.S. No. 2 grade of sunflower seed. Factors not associated with
grading of sunflower seed under the Official United States Standards for
Grain including, but not limited to, oil or moisture content will not be
considered.
Planted acreage--In addition to the definition contained in the
Basic Provisions, sunflower seed must initially be planted ini rows far
enough apart to permit mechanical cultivation, unless otherwise provided
by the Special Provisions, actuarial documents, or by written agreement.
2. Insurance Guarantees, Coverage Levels, and Prices for Determining
Indemnities
In addition to the requirements of section 3 (Insurance Guarantees,
Coverage Levels, and Prices for Determining Indemnities) of the Basic
Provisions (Sec. 457.8), you may select
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only one price election for all the sunflower seed in the county insured
under this policy. Notwithstanding the preceding sentence, if the
Special Provisions provide different price elections by type, you may
select one price election for each sunflower seed type designated in the
Special Provisions.
3. Contract Changes
The contract change date is November 30 (December 17 for the 1998
crop year only) preceding the cancellation date (see the provisions of
Section 4 (Contract Changes) of the Basic Provisions).
4. Cancellation and Termination Dates
In accordance with section 2 of the Basic Provisions (Sec. 457.8),
the cancellation and termination dates are March 15.
5. Insured Crop
In accordance with section 8 (Insured Crop) of the Basic Provisions
(Sec. 457.8), the crop insured will be all the oil and non-oil type
sunflower seed in the county for which a premium rate is provided by the
actuarial documents:
(a) In which you have a share;
(b) That is planted for harvest as sunflower seed; and
(c) That is not (unless a written agreement allows otherwise):
(1) Interplanted with another crop; or
(2) Planted into an established grass or legume.
6. Insurable Acreage
In addition to the provisions of section 9 (Insurable Acreage) of
the Basic Provisions (Sec. 457.8):
(a) We will not insure any acreage which does not meet the rotation
requirements shown in the Special Provisions; and
(b) Any acreage of the insured crop damaged before the final
planting date, to the extent that a majority of producers in the area
would not normally further care for the crop, must be replanted unless
we agree that it is not practical to replant.
7. Insurance Period
In accordance with the provisions of section 11 (Insurance Period)
of the Basic Provisions (Sec. 457.8), the calendar date for the end of
the insurance period is November 30, immediately following planting.
8. Causes of Loss
In accordance with the provisions of section 12 (Causes of Loss) of
the Basic Provisions (Sec. 457.8), insurance is provided only against
the following causes of loss which occur within the insurance period:
(a) Adverse weather conditions;
(b) Fire;
(c) Insects, but not damage due to insufficient or improper
application of pest control measures;
(d) Plant disease, but not damage due to insufficient or improper
application of disease control measures;
(e) Wildlife;
(f) Earthquake;
(g) Volcanic eruption; or
(h) If applicable, failure of the irrigation water supply due to an
unavoidable cause of loss occurring after the beginning of planting.
9. Replanting Payments
(a) In accordance with section 13 of the Basic Provisions, a
replanting payment for sunflower seed is allowed if the sunflowers are
damaged by an insurable cause of loss to the extent that the remaining
stand will not produce at least ninety percent of the production
guarantee for the acreage and it is practical to replant.
(b) The maximum amount of the replanting payment per acre will be
the lesser of twenty percent (20%) of the production guarantee or 175
(pounds of seed), multiplied by your price election, multiplied by your
insured share or the share determined in accordance with section 9(c),
if applicable.
(c) When more than one person insures the same crop on a share
basis, a replanting payment based on the total shares insured by us may
be made to the insured person who incurs the total cost of replanting.
Payment will be made in this manner only if an agreement exists between
the insured persons which:
(1) Requires one person to incur the entire cost of replanting; or
(2) Gives the right to all replanting payments to one person.
(d) When sunflower seed is replanted using a practice that is
uninsurable as an original planting, the liability for the unit will be
reduced by the amount of the replanting payment which is attributable to
your share. The premium amount will not be reduced.
10. Duties in the Event of Damage or Loss
In accordance with the requirements of section 14 (Duties in the
Event of Damage or Loss) of the Basic Provisions (Sec. 457.8), the
representative samples of the unharvested crop must be at least 10 feet
wide and extend the entire length of each field in the unit. The samples
must not be harvested or destroyed until the earlier of our inspection
or 15 days after harvest of the balance of the unit is completed.
11. Settlement of Claim
(a) We will determine your loss on a unit basis. In the event you
are unable to provide records of production:
[[Page 155]]
(1) For any optional unit, we will combine all optional units for
which acceptable records of production were not provided; or
(2) For any basic unit, we will allocate any commingled production
to such units in proportion to our liability on the harvested acreage
for each unit.
(b) In the event of loss or damage covered by this policy, we will
settle your claim on any unit by:
(1) Multiplying the insured acreage of each type of sunflower seed
by the production guarantee for the applicable type;
(2) Multiplying each result by the price election for the applicable
type;
(3) Adding these values;
(4) Multiplying the production to count of each type of sunflower
seed by the price election for that type;
(5) Adding these dollar values;
(6) Subtracting the result of step (5) from the result of step (3);
and
(7) Multiplying the result by your share.
(c) The total production (pounds) to count from all insurable
acreage on the unit will include:
(1) All appraised production as follows:
(i) Not less than the production guarantee for acreage:
(A) That is abandoned;
(B) Put to another use without our consent;
(C) Damaged solely by uninsured causes; or
(D) For which you fail to provide records of production that are
acceptable to us;
(ii) Production lost due to uninsured causes;
(iii) Unharvested production (mature unharvested production may be
adjusted for quality deficiencies and excess moisture in accordance with
subsection 11(d)); and
(iv) Potential production on insured acreage you want to put to
another use or you wish to abandon and no longer care for, if you and we
agree on the appraised amount of production. Upon such agreement, the
insurance period for that acreage will end if you put the acreage to
another use or abandon the crop. If agreement on the appraised amount of
production is not reached:
(A) If you do not elect to continue to care for the crop, we may
give you consent to put the acreage to another use if you agree to leave
intact, and provide sufficient care for, representative samples of the
crop in locations acceptable to us, (The amount of production to count
for such acreage will be based on the harvested production or appraisals
from the samples at the time harvest should have occurred. If you do not
leave the required samples intact, or you fail to provide sufficient
care for the samples, our appraisal made prior to giving you consent to
put the acreage to another use will be used to determine the amount of
production to count.); or
(B) If you elect to continue to care for the crop, the amount of
production to count for the acreage will be the harvested production, or
our reappraisal if additional damage occurs and the crop is not
harvested; and
(2) All harvested production from the insurable acreage.
(d) Mature sunflower seed production may be adjusted for excess
moisture and quality deficiencies. If moisture adjustment is applicable,
it will be made prior to any adjustment for quality.
(1) Production will be reduced by 0.12 percent for each 0.1
percentage point of moisture in excess of ten percent (10%). We may
obtain samples of the production to determine the moisture content.
(2) Production will be eligible for quality adjustment if:
(i) Deficiencies in quality result in:
(A) Oil type sunflower seed not meeting the grade requirements for
U.S. No. 2 (grades U.S. sample grade) because of test weight, kernel
damage (excluding heat damage), or a musty, sour or commercially
objectionable foreign odor; or
(B) Non-oil type sunflower seed having a test weight below 22 pounds
per bushel or kernel damage (excluding heat damage) in excess of five
percent (5%) or a musty, sour or commercially objectionable foreign
odor; or
(ii) Substances or conditions are present that are identified by the
Food and Drug Administration or other public health organizations of the
United States as being injurious to human or animal health.
(3) Quality will be a factor in determining your loss only if:
(i) The deficiencies, substances, or conditions, resulted from a
cause of loss against which insurance is provided under these crop
provisions and within the insurance period ;
(ii) All determinations of these deficiencies, substances, or
conditions are made using samples of the production obtained by us or by
a disinterested third party approved by us;
(iii) With regard to deficiencies in quality (except test weight,
which may be determined by our loss adjustor), the samples are analyzed
by:
(A) A grain grader licensed under the United States Grain Standards
Act or the United States Warehouse Act;
(B) A grain grader licensed under State law and employed by a
warehouse operator who has a storage agreement with the Commodity Credit
Corporation; or
(C) A grain grader not licensed under State law, but who is employed
by a warehouse operator who has a commodity storage agreement with the
Commodity Credit Corporation and is in compliance with State law
regarding warehouses; and
(iv) With regard to substances or conditions injurious to human or
animal health,
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the samples are analyzed by a laboratory approved by us.
(4) Sunflower seed production that is eligible for quality
adjustment, as specified in paragraphs 11(d) (2) and (3), will be
reduced:
(i) In accordance with quality adjustment factor provisions
contained in the Special Provisions; or
(ii) As follows, if quality adjustment factor provisions are not
contained in the Special Provisions:
(A) The market price of the qualifying damaged production and the
local market price will be determined on the earlier of the date such
quality adjusted production is sold or the date of final inspection for
the unit. The price for the qualifying damaged production will be the
market price for the local area to the extent feasible. Discounts used
to establish the net price of the damaged production will be limited to
those which are usual, customary, and reasonable. The price will not be
reduced for:
(1) Moisture content;
(2) Damage due to uninsured causes; or
(3) Drying, handling, processing, or any other costs associated with
normal harvesting, handling, and marketing of the sunflower seed;
except, if the price of the damaged production can be increased by
conditioning, we may reduce the price of the production after it has
been conditioned by the cost of conditioning but not lower than the
value of the production before conditioning. (We may obtain prices from
any buyer of our choice. If we obtain prices from one or more buyers
located outside your local market area, we will reduce such prices by
the additional costs required to deliver the sunflower seed to those
buyers.);
(B) The value of the damaged or conditioned production will be
divided by the local market price to determine the quality adjustment
factor; and
(C) The number of pounds remaining after any reduction due to
excessive moisture (the moisture-adjusted gross pounds (if appropriate))
of the damaged or conditioned production will then be multiplied by the
quality adjustment factor to determine the net production to count.
(e) Any production harvested from plants growing in the insured crop
may be counted as production of the insured crop on a weight basis.
12. Prevented Planting
Your prevented planting coverage will be 60 percent of your
production guarantee for timely planted acreage. If you have limited or
additional levels of coverage, as specified in 7 CFR part 400, subpart
T, and pay an additional premium, you may increase you prevented
planting coverage to a level specified in the actuarial documents.
[59 FR 67136, Dec. 29, 1994, as amended at 60 FR 62727, Dec. 7, 1995; 62
FR 63633, Dec. 2, 1997; 62 FR 65166, Dec. 10, 1997; 67 FR 55690, Aug.
30, 2002]
Sec. 457.109 Sugar Beet Crop Insurance Provisions.
The Sugar Beet Crop Insurance Provisions for the 1998 and succeeding
crop years in countries with a contract change date of November 30, and
for the 1999 and succeeding crop years in countries with a contract
change date of April 30, are as follows:
FCIC Policies
United States Department of Agriculture
Federal Crop Insurance Corporation
Reinsured policies
(Appropriate title for insurance provider)
Both FCIC and Reinsured Policies
Sugar Beet Crop Provisions
If a conflict exists among the policy provisions, the order of
priority is as follows: (1) The Catastrophic Risk Protection
Endorsement, if applicable; (2) the Special Provisions; (3) these Crop
Provisions; and (4) the Basic Provisions with (1) controlling (2), etc.
1. Definitions
Crop year. In Imperial, Lassen, Modoc, Shasta and Siskiyou counties,
California and all other States, the period within which the sugar beets
are normally grown, which is designated by the calendar year in which
the sugar beets are normally harvested. In all other California
counties, the period from planting until the applicable date for the end
of the insurance period which is designated by:
(a) The calendar year in which planted if planted on or before July
15; or
(b) The following calendar year if planted after July 15.
Harvest. Topping and lifting of sugar beets in the field.
Initially planted. The first occurrence that land is considered as
planted acreage for the crop year.
Local market price. The price per pound for raw sugar offered by
buyers in the area in which you normally market the sugar beets.
Planted acreage.--In addition to the definition contained in the
Basic Provisions, sugar beets must initially be planted in rows, unless
otherwise provided by the Special Provisions, actuarial documents, or by
written agreement.
[[Page 157]]
Practical to replant. In lieu of the definition of ``Practical to
replant'' contained in section 1 of the Basic Provisions (Sec. 457.8),
practical to replant is defined as our determination, after loss or
damage to the insured crop, based on factors, including but not limited
to moisture availability, condition of the field, time to crop maturity,
and marketing window, that replanting the insured crop will allow the
crop to attain maturity prior to the calendar date for the end of the
insurance period. It will not be considered practical to replant if
production from the replanted acreage cannot be delivered under the
terms of the processor contract, or 30 days after the initial planting
date for all counties where a late planting period is not applicable,
unless replanting is generally occurring in the area.
Processor. Any business enterprise regularly engaged in processing
sugar beets for sugar that possesses all licenses and permits for
processing sugar beets required by the State in which it operates, and
that possesses facilities, or has contractual access to such facilities,
with enough equipment to accept and process the contracted sugar beets
within a reasonable amount of time after harvest.
Production guarantee (per acre):
(a) First stage production guarantee--The final stage production
guarantee multiplied by 60 percent.
(b) Final stage production guarantee--The number of tons determined
by multiplying the approved yield per acre by the coverage level
percentage you elect.
Raw sugar. Sugar that has not been extracted from the sugar beet.
Standardized ton. A ton of sugar beets containing the percentage of
raw sugar specified in the Special Provisions.
Sugar beet processor contract. A written contract between the
producer and the processor, containing at a minimum:
(1) The producer's commitment to plant and grow sugar beets, and to
deliver the sugar beet production to the processor;
(2) The processor's commitment to purchase the production stated in
the contract; and
(3) A price or formula for a price based on third party data that
will be paid to the producer for the production stated in the contract.
Thinning. The process of removing, either by machine or hand, a
portion of the sugar beet plants to attain a desired plant population.
Ton. Two thousand (2,000) pounds avoirdupois.
2. Unit Division
In addition to the requirements of section 34 of the Basic
Provisions, basic units may be divided into optional units only if you
have a sugar beet processor contract that requires the processor to
accept all production from a number of acres specified in the sugar beet
processor contract. Acreage insured to fulfil a a sugar beet contract
which provides that the processor will accept a designated amount of
production or a combination of acreage and production will not be
eligible for optional units.
3. Insurance Guarantees, Coverage Levels, and Prices for Determining
Indemnities
(a) In addition to the requirements of section 3 (Insurance
Guarantees, Coverage Levels, and Prices for Determining Indemnities) of
the Basic Provisions (Sec. 457.8), you may select only one price
election for all the sugar beets in the county insured under this
policy.
(b) The production guarantees are progressive by stages, and
increase at specified intervals to the final stage. The stages are:
(1) First stage, with a guarantee of 60 percent (60%) of the final
stage production guarantee, extends from planting until:
(i) July 1 in Lassen, Modoc, Shasta and Siskiyou counties,
California and all other States except Arizona; and
(ii) The earlier of thinning or 90 days after planting in Arizona
and all other California counties.
(2) Final stage, with a guarantee of 100 percent (100%) of the final
stage production guarantee, applies to all insured sugar beets that
complete the first stage.
(c) The production guarantee will be expressed in standardized tons.
(d) Any acreage of sugar beets damaged in the first stage to the
extent that growers in the area would not normally further care for the
sugar beets will be deemed to have been destroyed, even though you may
continue to care for it. The production guarantee for such acreage will
not exceed the first stage production guarantee.
4. Contract Changes
In accordance with the provisions of section 4 (Contract Changes) of
the Basic Provisions, the contract change date is April 30 preceding the
cancellation date for counties with a July 15 or August 31 cancellation
date and November 30 (December 17 for the 1998 crop year only) preceding
the cancellation date for all other counties.
5. Cancellation and Termination Dates
In accordance with section 2 (Life of Policy, Cancellation, and
Termination) of the Basic Provisions (Sec. 457.8), the cancellation and
termination dates are:
------------------------------------------------------------------------
State and County Cancellation date Termination date
------------------------------------------------------------------------
Arizona; and Imperial County, August 31.......... August 31.
California.
[[Page 158]]
All California counties, except July 15............ November 30.
Imperial, Lassen, Modoc,
Shasta and Siskiyou.
All Other States, and Lassen, March 15........... March 15.
Modoc, Shasta and Siskiyou
Counties, California.
------------------------------------------------------------------------
6. Annual Premium
In lieu of the premium computation method contained in section 7
(Annual Premium) of the Basic Provisions (Sec. 457.8), the annual
premium amount is computed by multiplying the final stage production
guarantee by the price election, the premium rate, the insured acreage,
your share at the time of planting, and any applicable premium
adjustment factors contained in the Actuarial Table.
7. Insured Crop
(a) In accordance with section 8 (Insured Crop) of the Basic
Provisions (Sec. 457.8), the crop insured will be all the sugar beets
in the county for which a premium rate is provided by the actuarial
documents:
(1) In which you have a share;
(2) That are planted for harvest as sugar beets;
(3) That are grown under a sugar beet processor contract executed
before the acreage reporting date and are not excluded from the
processor contract at any time during the crop year; and
(4) That are not (unless allowed by the Special Provisions or by
written agreement):
(i) Interplanted with another crop;
(ii) Planted into an established grass or legume; or
(iii) Planted prior to submitting a properly completed application.
(b) Sugar beet growers who are also processors may establish an
insurable interest if they meet the following requirements:
(1) The processor must meet the definition of a ``processor'' in
section 1 of these crop provisions and have a valid insurable interest
in the sugar beet crop;
(2) The Board of Directors or officers of the processor must have
duly promulgated a resolution that sets forth essentially the same terms
as a sugar beet processor contract. Such resolution will be considered a
sugar beet processing contract under the terms of the sugar beet crop
insurance policy;
(3) The sales records of the processor showing the amount of sugar
produced the previous year must be supplied to us to confirm the
processor has produced and sold sugar in the past; and
(4) Our inspection of the processing facilities determines that they
conform to the definition of processor contained in section 1 of these
crop provisions.
8. Insurable Acreage
In addition to the provisions of section 9 (Insurable Acreage) of
the Basic Provisions (Sec. 457.8):
(a) We will not insure any acreage planted to sugar beets:
(1) The preceding crop year, unless otherwise specified in the
Special Provisions for the county;
(2) In any crop year following the discovery of rhizomania on the
acreage, unless allowed by the Special Provisions or by written
agreement; or
(3) That does not meet the rotation requirements shown in the
Special Provisions;
(b) Any acreage of the insured crop damaged before the final
planting date, (or within 30 days of initial planting for those counties
without a final planting date) to the extent that growers in the area
would normally not further care for the crop, must be replanted unless
we agree that replanting is not practical.
9. Insurance Period
(a) In accordance with the provisions of section 11 (Insurance
Period) of the Basic Provisions (Sec. 457.8), the calendar date for the
end of the insurance period is:
(1) July 15 in Arizona and in Imperial County, California;
(2) The last day of the 12th month after the insured crop was
initially planted in all California counties except Imperial, Lassen,
Modoc, Shasta and Siskiyou;
(3) October 31 in Lassen, Modoc, Shasta and Siskiyou Counties,
California, and in Klamath County, Oregon;
(4) November 25 in Ohio;
(5) December 31 in New Mexico and Texas; and
(6) November 15 in all other States and counties.
(b) In addition to the provisions of section 11 (Insurance Period)
of the Basic Provisions (Sec. 457.8), regarding the end of the
insurance period, the insurance period ends for all units when the
production delivered to the processor equals the amount of production
stated in the sugar beet processor contract.
10. Causes of Loss
In accordance with the provisions of section 12 (Causes of Loss) of
the Basic Provisions (Sec. 457.8), insurance is provided only against
the following causes of loss that occur within the insurance period:
(a) Adverse weather conditions;
(b) Fire;
(c) Insects, but not damage due to insufficient or improper
application of pest control measures;
[[Page 159]]
(d) Plant disease, but not damage due to insufficient or improper
application of disease control measures;
(e) Wildlife;
(f) Earthquake;
(g) Volcanic eruption; or
(h) Failure of the irrigation water supply, if caused by an insured
peril that occurs during the insurance period.
11. Replanting Payments
(a) In accordance with section 13 (Replanting Payment) of the Basic
Provisions (Sec. 457.8), a replanting payment is allowed if the crop is
damaged by an insurable cause of loss to the extent that the remaining
stand will not produce at least 90 percent (90%) of the final stage
production guarantee for the acreage and it is practical to replant.
(b) The maximum amount of the replanting payment per acre will be
the lesser of 10 percent (10%) of the final stage production guarantee
or one ton, multiplied by your price election, multiplied by your
insured share.
(c) When sugar beets are replanted using a practice that is
uninsurable for an original planting, our liability on the unit will be
reduced by the amount of the replanting payment. The premium amount will
not be reduced.
12. Duties in the Event of Damage or Loss
In accordance with the requirements of section 14 (Duties in the
Event of Damage or Loss) of the Basic Provisions (Sec. 457.8):
(a) Representative samples of the unharvested crop must be at least
10 feet wide and extend the entire length of each field in the unit. The
samples must not be harvested or destroyed until the earlier of our
inspection or 15 days after harvest of the balance of the unit is
completed; and
(b) You must provide a copy of your sugar beet processor contract or
corporate resolution if you are the processor.
13. Settlement of Claim
(a) We will determine your loss on a unit basis. In the event you
are unable to provide separate acceptable production records:
(1) For any optional unit, we will combine all optional units for
which acceptable production records were not provided; or
(2) For any basic unit, we will allocate any commingled production
to such units in proportion to our liability on the harvested acreage
for each unit.
(b) In the event of loss or damage covered by this policy, we will
settle your claim on any unit by:
(1) Multiplying the insured acreage by its respective production
guarantee;
(2) Subtracting the total production to count from the result in
paragraph (b)(1);
(3) Multiplying the result of paragraph (b)(2) by your price
election; and
(4) Multiplying the result of paragraph (b)(3) by your share.
(c) The total production to count (in standardized tons) from all
insurable acreage on the unit will include:
(1) All appraised production as follows:
(i) Not less than the production guarantee for acreage:
(A) That is abandoned;
(B) Put to another use without our consent;
(C) That is damaged solely by uninsured causes; or
(D) For which you fail to provide acceptable production records that
are acceptable to us;
(ii) Production lost due to uninsured causes;
(iii) Unharvested production (unharvested production that is
appraised prior to the earliest delivery date that the processor accepts
harvested production will not be eligible for a conversion to
standardized tons in accordance with section 13 (d) and (e));
(iv) Only appraised production in excess of the difference between
the first and final stage production guarantee for acreage that does not
qualify for the final stage guarantee will be counted, except that all
production from acreage subject to section 13(c)(1) (i) and (ii) will be
counted; and
(v) Potential production on insured acreage that you intend to put
to another use or abandon, if you and we agree on the appraised amount
of production. Upon such agreement, the insurance period for that
acreage will end if you put the acreage to another use or abandon the
crop. If agreement on the appraised amount of production is not reached:
(A) If you do not elect to continue to care for the crop, we may
give you consent to put the acreage to another use if you agree to leave
intact, and provide sufficient care for, representative samples of the
crop in locations acceptable to us (The amount of production to count
for such acreage will be based on the harvested production or appraisals
from the samples at the time harvest should have occurred. If you do not
leave the required samples intact, or you fail to provide sufficient
care for the samples, our appraisal made prior to giving you consent to
put the acreage to another use will be used to determine the amount of
production to count); or
(B) If you elect to continue to care for the crop, the amount of
production to count for the acreage will be the harvested production, or
our reappraisal if additional damage occurs and the crop is not
harvested; and
(2) All harvested production from the insurable acreage.
[[Page 160]]
(d) Harvested production or unharvested production that is appraised
after the earliest delivery date that the processor accepts harvested
production and that meets the minimum acceptable standards contained in
the sugar beet processor contract or corporate resolution will be
converted to standardized tons by:
(1) Dividing the average percentage of raw sugar in such sugar beets
by the raw sugar content percentage shown in the Special Provisions; and
(2) Multiplying the result (rounded to three places) by the number
of tons of such sugar beets.
The average percentage of raw sugar will be determined from tests
performed by the processor at the time of delivery. If individual tests
of raw sugar content are not made at the time of delivery, the average
percent of raw sugar may be based on the results of previous tests
performed by the processor during the crop year if it is determined that
such results are representative of the total production. If not
representative, the average percent of raw sugar will equal the raw
sugar content percent shown in the Special Provisions.
(e) Harvested production or unharvested production that is appraised
after the earliest delivery date that the processor accepts harvested
production and that does not meet the minimum acceptable standards
contained in the sugar beet processor contract due to an insured peril
will be converted to standardized tons by:
(1) Dividing the gross dollar value of all of the damaged sugar
beets on the unit (including the value of cooperative stock, patronage
refunds, etc.) by the local market price per pound on the earlier of the
date such production is sold or the date of final inspection for the
unit;
(2) Dividing that result by 2,000; and
(3) Dividing that result by the county average raw sugar factor
contained in the Special Provisions for this purpose.
For example, assume that the total dollar value of the damaged sugar
beets is $6,000.00; the local market price is $0.10; and the county
average raw sugar factor is 0.15. The amount of production to count
would be calculated as follows: (($6,000.00 / $0.10) / 2,000) / 0.15 =
200 tons.
14. Late and Prevented Planting
The late planting provisions contained in section 16 of the Basic
Provisions are not applicable in California counties with a July 15,
cancellation date.
15. Prevented Planting
(a) The prevented planting provision contained in sectino 17 of the
Basic Provisions are not applicable in Califronia counties with a July
15, cancellation date.
(b) Except in those counties indicated in section 15(a), your
prevented planting coverage will be 45 percent of your production
guarantee for timely planted acreage. If you have limited or additional
levels of coverage, as specified in 7 CFR part 400, subpart T, and pay
an additional premium, you may increase your prevented planting coverage
to a level specified in the actuarial documents.
[61 FR 58775, Nov. 19, 1996, as amended at 62 FR 63633, Dec. 2, 1997; 62
FR 65167, Dec. 10, 1997]
Sec. 457.110 Fig crop insurance provisions.
The Fig Crop Insurance Provisions for the 2001 and succeeding crop
years are as follows:
United States Department of Agriculture
Federal Crop Insurance Corporation
Fig Crop Provisions
If a conflict exists among the policy provisions, the order of
priority is as follows: (1) The Catastrophic Risk Protection
Endorsement, if applicable; (2) the Special Provisions; (3) these Crop
Provisions; and (4) the Basic Provisions with (1) controlling (2), etc.
1. Definitions
Harvest--The picking of the figs from the trees or ground by hand or
machine for the purpose of removal from the orchard.
Interplanted--Acreage on which two or more crops are planted in any
form of alternating or mixed pattern.
Manufacturing grade production-- Production that meets the minimum
grade standards and is defined as ``manufacturing grade'' by the
Marketing Order for Dried Figs, as amended, which is in effect on the
date insurance attaches.
Marketable figs-- Figs that grade manufacturing grade or better in
accordance with the Marketing Order for Dried Figs, as amended, which is
in effect on the date insurance attaches.
Substandard production-- Production that does not meet minimum grade
standards and is defined as ``substandard'' by the Marketing Order for
Dried Figs, as amended, which is in effect on the date insurance
attaches.
2. Unit Division
(a) A basic unit, as defined in section 1 of the Basic Provisions,
will be divided into additional basic units by each fig type designated
in the Special Provisions.
(b) Provisions in the Basic Provisions that allow optional units by
section, section equivalent, or FSA farm serial number and by irrigated
and non-irrigated practices are
[[Page 161]]
not applicable. Optional units may be established only if each optional
unit is located on non-contiguous land, unless otherwise allowed by
written agreement.
3. Insurance Guarantees, Coverage Levels, and Prices for Determining
Indemnities
(a) In addition to the requirements under section 3 of the Basic
Provisions, you may select only one price election for each fig type
designated in the Special Provisions and insured in the county under
this policy.
(b) You may not increase your elected or assigned coverage level or
the ratio of your price election to the maximum price election if a
cause of loss that could or would reduce the yield of the insured crop
has occurred prior to the time you request the increase.
(c) You must report, by the production reporting date designated in
section 3 of the Basic Provisions, by type if applicable:
(1) Any damage, removal of trees, change in practices, or any other
circumstance that may reduce the expected yield below the yield upon
which the insurance guarantee is based, and the number of affected
acres;
(2) The number of bearing trees on insurable and uninsurable
acreage;
(3) The age of the trees and the planting pattern;
(4) For the first year of insurance for acreage interplanted with
another perennial crop, and anytime the planting pattern of such acreage
is changed, the age of the crop that is interplanted with the figs, and
type if applicable, and the planting pattern; and
(5) Any other information that we request in order to establish your
approved yield. We will reduce the yield used to establish your
production guarantee as necessary, based on our estimate of the effect
of the following: Interplanted perennial crop; removal of trees; damage;
change in practices and any other circumstance on the yield potential of
the insured crop. If you fail to notify us of any circumstance that may
reduce your yields from previous levels, we will reduce your production
guarantee as necessary at any time we become aware of the circumstance.
4. Contract Changes
The contract change date is October 31 preceding the cancellation
date (see the provisions under section 4 (Contract Changes) of the Basic
Provisions (Sec. 457.8)).
5. Cancellation and Termination Dates
The cancellation and termination dates are February 28.
6. Report of Acreage
By applying for fig crop insurance, you authorize us to have access
to and to determine or verify your production and acreage from records
maintained by the California Fig Advisory Board and the fig packer.
7. Insured Crop
The crop insured will be all the commercially grown dried figs that
are grown in the county on insurable acreage, and for which a premium
rate is provided by the actuarial documents:
(a) In which you have a share;
(b) That are grown for harvest as dried figs;
(c) That are irrigated;
(d) That have reached the seventh growing season after being set
out; and
(e) For which acceptable production records for at least the
previous crop year are provided;
(f) That are not figs:
(1) Grown on acreage with less than 90 percent of a stand based on
the original planting pattern unless we agree, in writing, to insure
such figs;
(2) Which we inspect and consider not acceptable;
(3) Grown for the crop year the application is filed unless
inspected and accepted by us; or
(4) Grown on acreage acquired for the crop year unless such acreage
has been inspected and accepted by us.
8. Insurable Acreage
In lieu of the provisions in section 9 of the Basic Provisions, that
prohibit insurance attaching to a crop planted with another crop, figs
interplanted with another perennial crop are insurable unless we inspect
the acreage and determine that it does not meet the requirements
contained in your policy.
9. Insurance Period
(a) In accordance with the provisions of section 11 of the Basic
Provisions:
(1) Coverage begins on March 1, except that for the year of
application, if your application is received after February 19 but prior
to March 1, insurance will attach on the 10th day after your properly
completed application is received in our local office, unless we inspect
the acreage during the 10 day period and determine that it does not meet
insurability requirements. You must provide any information that we
require for the crop or to determine the condition of the orchard.
(2) The calendar date for the end of the insurance period for each
crop year is October 31 or the date harvest of the figs (by type) should
have started on any acreage that will not be harvested (Exceptions, if
any, for specific counties or varieties or varietal group are contained
in the Special Provisions).
(b) Notwithstanding paragraph (a)(1) of this section, for each
subsequent crop year that the policy remains continuously in
[[Page 162]]
force, coverage begins on the day immediately following the end of the
insurance period for the prior crop year. Policy cancellation that
results solely from transferring to a different insurance provider for a
subsequent crop year will not be considered a break in continuous
coverage.
(c) If your fig policy is canceled or terminated for any crop year,
in accordance with the terms of the policy, after insurance attached for
that crop year but on or before the cancellation and termination dates
whichever is later, insurance will not be considered to have attached
for that crop year and no premium, administrative fee, or indemnity will
be due for such crop year.
10. Causes of Loss
(a) In addition to the provisions under section 12 (Causes of Loss)
of the Basic Provisions (Sec. 457.8), any loss covered by this policy
must occur within the insurance period. The specific causes of loss for
figs are:
(1) Adverse weather conditions;
(2) Earthquake;
(3) Fire;
(4) Volcanic eruption;
(5) Wildlife; or
(6) Failure of the irrigation water supply.
(b) In addition to the causes of loss not insured against contained
in section 12 (Causes of Loss) of the Basic Provisions (Sec. 457.8), we
will not insure against:
(1) Any loss of production due to fire, where weeds and other forms
of undergrowth have not been controlled or tree pruning debris has not
been removed from the grove; or
(2) The inability to market the fruit as a direct result of
quarantine, boycott, or refusal of any entity to accept production.
11. Settlement of Claim
(a) We will determine your loss on a unit basis. In the event you
are unable to provide records of production that are acceptable to us
for any:
(1) Optional unit, we will combine all optional units for which
acceptable records of production were not provided; or
(2) Basic unit, we will allocate any commingled production to such
units in proportion to our liability on the harvested acreage for each
unit.
(b) In the event of loss or damage covered by this policy, we will
settle your claim by:
(1) Multiplying the insured acreage by the production guarantee;
(2) Subtracting from this the total production to count;
(3) Multiplying the remainder by your price election; and
(4) Multiplying this result by your share.
(c) The total production (pounds) to count from all insurable
acreage on the unit will include all harvested and appraised marketable
figs.
(1) Figs, which due to insurable causes, grade manufacturing grade
will be adjusted by:
(i) Dividing the value per pound of the manufacturing grade
production by the highest price election available for the insured type;
and
(ii) Multiplying the result (not to exceed 1) by the number of
pounds of such manufacturing grade production.
(2) Figs, which due to insurable causes, grade substandard and are
delivered to the substandard pool will not be considered production to
count, provided all the insured's substandard production is inspected by
us and we give written consent to such delivery prior to delivery. If we
do not give written consent prior to the delivery to the substandard
pool, all production will be counted as undamaged marketable production.
Substandard production for which we give written consent to you prior to
delivery to the substandard pool, which is not delivered to the
substandard pool, and is sold by you, will be considered production to
count and adjusted as follows:
(i) Dividing the value per pound received for such substandard
production by the highest price election available for the insured type;
and
(ii) Multiplying the result (not to exceed 1) by the number of
pounds of such substandard production.
(3) Appraised production to be counted will include:
(i) Potential production lost due to uninsured causes and failure to
follow recognized good fig farming practices;
(ii) Not less than the production guarantee for the figs on any
acreage:
(A) That is abandoned without our consent;
(B) Damaged solely by uninsured causes;
(c) If the figs are destroyed by you without our consent; or
(D) For which you fail to provide records of production that are
acceptable to us;
(iii) Unharvested production which would be marketable if harvested;
and
(iv) Potential production on insured acreage that you want to
abandon and no longer care for if you and we agree on the appraised
amount of production. Upon such agreement, the insurance period for that
acreage will end if you abandon the crop. If agreement on the appraised
amount of production is not reached:
(A) We may require you to continue to care for the crop so that a
subsequent appraisal may be made or the crop harvested to determine
actual production. You must notify us within three days of the date
harvest should have started if the crop is not harvested; or
(B) You may elect to continue to care for the crop. We will
determine the amount of production to count for the acreage using the
harvested production or our reappraisal if the crop is not harvested.
[[Page 163]]
12. Late and Prevented Planting
The late and prevented planting provisions of the Basic Provisions
are not applicable.
[59 FR 9615, Mar. 1, 1994, as amended at 62 FR 65167, Dec. 10, 1997; 65
FR 47836, Aug. 4, 2000]
Sec. 457.111 Pear crop insurance provisions.
The Pear Crop Insurance Provisions for the 2001 and succeeding crop
years are as follows:
FCIC Policies
Department of Agriculture
Federal Crop Insurance Corporation
Reinsured Policies
(Appropriate title for insurance provider)
Both FCIC and Reinsured Policies
Pear Crop Provisions
If a conflict exists among the policy provisions, the order of
priority is as follows: (1) The Catastrophic Risk Protection
Endorsement, if applicable; (2) the Special Provisions; (3) these Crop
Provisions; and (4) the Basic Provisions with (1) controlling (2), etc.
1. Definitions
Direct marketing. Sale of the insured crop directly to consumers
without the intervention of an intermediary such as a wholesaler,
retailer, packer, processor, shipper, or buyer. Examples of direct
marketing include selling through an on-farm or roadside stand, farmer's
market, and permitting the general public to enter the field for the
purpose of picking all or a portion of the crop.
Harvest. The picking of mature pears from the trees or the
collecting of marketable pears from the ground.
Interplanted. Acreage on which two or more crops are planted in any
form of alternating or mixed pattern.
Marketable. Pear production acceptable for processing or other human
consumption even if failing to meet any U.S. or applicable state grading
standard.
Ton. Two thousand (2,000) pounds avoirdupois.
Varietal group. Types of pears with similar characteristics that are
grouped for insurance purposes as specified in the Special Provisions.
2. Unit Division
(a) Provisions in the Basic Provision that allow optional units by
irrigated and non-irrigated practices are not applicable.
(b) Instead of establishing optional units by section, section
equivalents, or FSA farm serial number optional units may be established
if each optional unit is located on non-contiguous.
(c) In addition to, or instead of, establishing optional units by
section, section equivalents, FSA farm serial number, or on non-
contiguous land, optional units may be established by varietal group
when provided for in the Special Provisions. The requirements of section
34(a)(1) of the Basic Provisions are not applicable for this method of
unit division.
3. Insurance Guarantees, Coverage Levels, and Prices for Determining
Indemnities
In addition to the requirements of section 3 (Insurance Guarantees,
Coverage Levels, and Prices for Determining Indemnities) of the Basic
Provisions (Sec. 457.8):
(a) You may select only one price election for all the pears in the
county insured under this policy unless the Special Provisions provide
different price elections by varietal group, in which case you may
select one price election for each varietal group designated in the
Special Provisions. The price elections you choose for each varietal
group must have the same percentage relationship to the maximum price
offered by us for each varietal group. For example, if you choose one
hundred percent (100%) of the maximum price election for one varietal
group, you must also choose one hundred percent (100%) of the maximum
price election for all other varietal groups.
(b) You must report, by the production reporting date designated in
section 3 (Insurance Guarantees, Coverage Levels, and Prices for
Determining Indemnities) of the Basic Provisions (Sec. 457.8), by
varietal group:
(1) Any damage, removal of trees, change in practices or any other
circumstance that may reduce the expected yield below the yield upon
which the insurance guarantee is based, and the number of affected
acres;
(2) The number of bearing trees on insurable and uninsurable
acreage;
(3) The age of the trees and the planting pattern; and
(4) For the first year of insurance for acreage interplanted with
another perennial crop, and any time the planting pattern of such
acreage is changed:
(i) The age of the interplanted crop, and type if applicable;
(ii) The planting pattern; and
(iii) Any other information that we request in order to establish
your approved yield. We will reduce the yield used to establish your
production guarantee as necessary, based on our estimate of the effect
of the following: interplanted perennial crop; removal of trees; damage;
change in practices or any other circumstance on the yield potential of
the insured crop. If you fail to notify us of any circumstance that may
reduce your yields from previous levels, we will reduce your production
guarantee as necessary at
[[Page 164]]
any time that we become aware of the circumstance.
(c) You may not increase your elected or assigned coverage level or
the ratio of your price election to the maximum price election if a
cause of loss that could or would reduce the yield of the insured crop
has occurred prior to the time that you request the increase.
4. Contract Changes
In accordance with section 4 (Contract Changes) of the Basic
Provisions (Sec. 457.8), the contract change date is October 31
preceding the cancellation date for states with a January 31
cancellation date and August 31 preceding the cancellation date for all
other states.
5. Cancellation and Termination Dates
In accordance with section 2 (Life of Policy, Cancellation, and
Termination) of the Basic Provisions (Sec. 457.8), the cancellation and
termination dates are:
------------------------------------------------------------------------
Cancellation and termination
States dates
------------------------------------------------------------------------
California............................. January 31.
All other states....................... November 20.
------------------------------------------------------------------------
6. Insured Crop
In accordance with section 8 (Insured Crop) of the Basic Provisions
(Sec. 457.8), the crop insured will be all the pears in the county for
which a premium rate is provided by the actuarial documents:
(a) In which you have a share;
(b) That are of varieties adapted to the area;
(c) That are grown on trees that have produced an average of at
least five (5) tons of pears per acre in at least one of the four
previous crop years unless the Special Provisions or a written agreement
establishes a lower production level; and
(d) That are grown in an orchard that, if inspected, is considered
acceptable by us.
7. Insurable Acreage
In lieu of the provisions in section 9 (Insurable Acreage) of the
Basic Provisions (Sec. 457.8), that prohibit insurance attaching to a
crop planted with another crop, pears interplanted with another
perennial crop are insurable unless we inspect the acreage and determine
that it does not meet the requirements contained in your policy.
8. Insurance Period
(a) In accordance with the provisions of section 11 (Insurance
Period) of the Basic Provisions (Sec. 457.8):
(1) Coverage begins:
(i) In California, on February 1 of each crop year, except that for
the year of application, if your application is received after January
22 but prior to February 1, insurance will attach on the 10th day after
your properly completed application is received in our local office,
unless we inspect the acreage during the 10 day period and determine
that it does not meet insurability requirements. You must provide any
information that we require for the crop or to determine the condition
of the orchard; or
(ii) In all other states, on November 21 of each crop year, except
that for the year of application, if your application is received after
November 11 but prior to November 21, insurance will attach on the 10th
day after your properly completed application is received in our local
office, unless we inspect the acreage during the 10 day period and
determine that it does not meet insurability requirements. You must
provide any information that we require for the crop or to determine the
condition of the orchard.
(2) The calendar date for the end of the insurance period for each
crop year is:
(i) September 15 for Bartlett (green and red) and Star Crimson
(Crimson Red) varietal groups; or
(ii) October 15 for all other varietal groups.
(b) In addition to the provisions of section 11 (Insurance Period)
of the Basic Provisions (Sec. 457.8):
(1) If you acquire an insurable share in any insurable acreage after
coverage begins but on or before the acreage reporting date for the crop
year, and after an inspection we consider the acreage acceptable,
insurance will be considered to have attached to such acreage on the
calendar date for the beginning of the insurance period.
(2) If you relinquish your insurable interest on any insurable
acreage of pears on or before the acreage reporting date of any crop
year, insurance will not be considered to have attached to, and no
premium will be due, and no indemnity paid, for such acreage for that
crop year unless:
(i) A transfer of coverage and right to an indemnity, or a similar
form approved by us, is completed by all affected parties;
(ii) We are notified by you or the transferee in writing of such
transfer on or before the acreage reporting date; and
(iii) The transferee is eligible for crop insurance.
(c) Notwithstanding paragraph (a)(1) of this section, for each
subsequent crop year that the policy remains continuously in force,
coverage begins on the day immediately following the end of the
insurance period for the prior crop year. Policy cancellation that
results solely from transferring to a different insurance provider for a
subsequent crop year will not be considered a break in continuous
coverage.
(d) If your pear policy is canceled or terminated for any crop year,
in accordance with
[[Page 165]]
the terms of the policy, after insurance attached for that crop year but
on or before the cancellation and termination dates whichever is later,
insurance will not be considered to have attached for that crop year and
no premium, administrative fee, or indemnity will be due for such crop
year.
9. Causes of Loss
(a) In accordance with the provisions of section 12 (Causes of Loss)
of the Basic Provisions (Sec. 457.8), insurance is provided only
against the following causes of loss that occur within the insurance
period:
(1) Adverse weather conditions;
(2) Fire, unless weeds and other forms of undergrowth have not been
controlled or pruning debris has not been removed from the orchard;
(3) Earthquake;
(4) Volcanic eruption; or
(5) Failure of the irrigation water supply, if caused by an insured
peril that occurs during the insurance period.
(b) In addition to the causes of loss excluded in section 12 (Causes
of Loss) of the Basic Provisions (Sec. 457.8), we will not insure
against damage or loss of production due to:
(1) Disease or insect infestation, unless adverse weather:
(i) Prevents the proper application of control measures or causes
properly applied control measures to be ineffective; or
(ii) Causes disease or insect infestation for which no effective
control mechanism is available.
(2) Failure of the fruit to color properly; or
(3) Inability to market the pears for any reason other than actual
physical damage from an insurable cause specified in this section. For
example, we will not pay you an indemnity if you are unable to market
due to quarantine, boycott, or refusal of any person to accept
production.
10. Duties in the Event of Damage or Loss
In addition to the requirements of section 14 (Duties in the Event
of Damage or Loss) of the Basic Provisions (Sec. 457.8), the following
will apply:
(a) You must notify us within 3 days of the date harvest should have
started if the crop will not be harvested.
(b) You must notify us at least 15 days before any production from
any unit will be sold by direct marketing. We will conduct an appraisal
that will be used to determine your production to count for production
that is sold by direct marketing. If damage occurs after this appraisal,
we will conduct an additional appraisal. These appraisals, and any
acceptable records provided by you, will be used to determine your
production to count. Failure to give timely notice that production will
be sold by direct marketing will result in an appraised amount of
production to count of not less than the production guarantee per acre
if such failure results in our inability to make the required appraisal.
(c) If you intend to claim an indemnity on any unit, you must notify
us at least 15 days prior to the beginning of harvest if you previously
gave notice in accordance with section 14 of the Basic Provisions (Sec.
457.8), so that we may inspect the damaged production. You must not sell
or dispose of the damaged crop until after we have given you written
consent to do so. If you fail to meet the requirements of this section,
and such failure results in our inability to inspect the damaged
production, all such production will be considered undamaged and
included as production to count.
11. Settlement of Claim
(a) We will determine your loss on a unit basis. In the event you
are unable to provide separate, acceptable production records:
(1) For any optional unit, we will combine all optional units for
which such production records were not provided; or
(2) For any basic unit, we will allocate any commingled production
to such units in proportion to our liability on the harvested acreage
for each unit.
(b) In the event of loss or damage covered by this policy, we will
settle your claim by:
(1) Multiplying the insured acreage for each varietal group if
applicable, by its respective production guarantee;
(2) Multiplying the results of section 11(b)(1) by the respective
price election for each varietal group, if applicable;
(3) Totaling the results of section 11(b)(2);
(4) Multiplying the total production to be counted of each varietal
group, if applicable, by the respective price election;
(5) Totaling the results of section 11(b)(4);
(6) Subtracting this result of section 11(b)(5) from the result of
section 11(b)(3); and
(7) Multiplying the result of section 11(b)(6) by your share.
(c) The total production to count (in tons) from all insurable
acreage on the unit will include:
(1) All appraised production as follows:
(i) Not less than the production guarantee per acre for acreage:
(A) That is abandoned;
(B) That is sold by direct marketing if you fail to meet the
requirements contained in section 10;
(C) That is damaged solely by uninsured causes; or
(D) For which you fail to provide production records that are
acceptable to us;
(ii) Production lost due to uninsured causes;
(iii) Unharvested production; and
(iv) Potential production on insured acreage that you intend to
abandon or no longer care for, if you and we agree on the appraised
[[Page 166]]
amount of production. Upon such agreement, the insurance period for that
acreage will end. If you do not agree with our appraisal, we may defer
the claim only if you agree to continue to care for the crop. We will
then make another appraisal when you notify us of further damage or that
harvest is general in the area unless you harvested the crop, in which
case we will use the harvested production. If you do not continue to
care for the crop, our appraisal made prior to deferring the claim will
be used to determine the production to count; and
(2) For all states except California, all harvested and appraised
marketable pear production from the insurable acreage.
(3) For California, all harvested and appraised production that:
(i) Meets the standards for first grade canning as defined by the
California Pear Advisory Board or for U.S. Number 1 as defined by the
United States Standards for Grades of Summer and Fall Pears, or Pears
for Processing, or for U.S. Extra Number 1 or U.S. Number 1 as defined
by the United States Standards for Grades of Winter Pears;
(ii) Is accepted by a processor for canning or packing; or
(iii) Is marketable for any purpose. However, if the pears are
damaged by an insured cause, the production to count will be reduced by
the greater of the following amounts:
(A) The excess over ten percent (10%) of pears that are size 180 or
smaller for varieties other than Forelle, Seckel or Winter Nelis; or
(B) The result of dividing the value per ton of such pears by the
highest price election for the insured varietal group, subtracting this
result from 1.000, and multiplying this difference (if positive) by the
number of tons of such pears.
12. Late and Prevented Planting
The late and prevented planting provisions of the Basic Provisions
are not applicable.
13. Pear Quality Adjustment Endorsement
(a) This endorsement applies to any crop year: Provided,
(1) The insured pears are located in a State other than California
and the actuarial documents designate a premium rate for this
endorsement;
(2) You have not elected to insure your pears under the Catastrophic
Risk Protection (CAT) Endorsement;
(3) You elected it on your application or other form approved by us,
and did so on or before the sales closing date for the initial crop year
for which you wish it to be effective. By doing so, you agreed to pay
the additional premium designated in the actuarial documents for this
optional coverage; and
(4) You or we did not cancel it in writing on or before the
cancellation date. Your election of CAT coverage for any crop year after
this endorsement is effective will be considered as notice of
cancellation by you.
(b) If the pear production is damaged by hail and if eleven percent
(11%) or more of the harvested and appraised production does not grade
at least U.S. No. 2 in accordance with applicable United States
Standards for Grades of Summer and Fall Pears, United States Standards
for Grades of Winter Pears, or United States Standards for Grades of
Pears for Processing, as applicable, due solely to hail, the amount of
production to count will be reduced as follows:
(1) By two percent (2%) for each full one percent (1%) in excess of
ten percent (10%), when eleven percent (11%) through sixty percent (60%)
of the pears fail the grade standard; or
(2) By one hundred percent (100%) when more than sixty percent (60%)
of the pears fail the grade standard.
The difference between the reduced production determined in section
13(b) and the total production will be considered as cull production.
(c) Pears that are knocked to the ground by wind or that are frozen
and cannot be packed or marketed as fresh pears will be considered one
hundred percent (100%) cull production.
(d) Marketable production that grades less than U.S. No. 2 due to
causes not covered by this endorsement will not be reduced.
(e) Fifteen percent (15%) of all production considered as cull
production in accordance with section 13 (b) and (c) will be production
to count.
[61 FR 57580, Nov. 7, 1996; 62 FR 2007, Jan. 15, 1997; 62 FR 65167, Dec.
10, 1997; 65 FR 47837, Aug. 4, 2000]
Sec. 457.112 Hybrid sorghum seed crop insurance provisions.
The Hybrid Sorghum Seed Crop Insurance Provisions for the 1998 and
succeeding crop years are as follows:
FCIC policies:
United States Department of Agriculture
Federal Crop Insurance Corporation
Reinsured Policies
(Appropriate title for insurance provider)
Both FCIC and Reinsured Policies
Hybrid Sorghum Seed Crop Provisions
If a conflict exists among the policy provisions, the order of
priority is as follows:
(1) The Catastrophic Risk Protection Endorsement, if applicable; (2)
the Special Provisions; (3) these Crop Provisions; and (4) the
[[Page 167]]
Basic Provisions, (Sec. 457.8) with (1) controlling (2), etc.
1. Definitions
Adjusted yield. An amount determined by multiplying the county yield
by the coverage level factor.
Amount of insurance per acre. A dollar amount determined by
multiplying the adjusted yield by the price election you select and
subtracting any minimum guaranteed payment, not to exceed the total
compensation specified in the hybrid sorghum seed processor contract. If
your hybrid sorghum seed processor contract contains a minimum
guaranteed payment that is stated in bushels, we will convert that value
to dollars by multiplying it by the price election you selected.
Approved yield. In lieu of the definition contained in the Basic
Provisions, an amount FCIC determines to be representative of the yield
that the female parent plants are expected to produce when grown under a
specific production practice. FCIC will establish the approved yield
based upon records provided by the seed company and other information it
deems appropriate.
Bushel. Fifty-six pounds avoirdupois of the insured crop.
Certified seed test. A warm germination test performed on clean seed
according to specifications of the ``Rules for Testing Seeds'' of the
Association of Official Seed Analysts.
Commercial hybrid sorghum seed. The offspring produced by crossing a
male and female parent plant, each having a different genetic character.
This offspring is the product intended for use by an agricultural
producer to produce a commercial field sorghum crop for grain or forage.
County yield. An amount contained in the actuarial documents that is
established by FCIC to represent the yield that a producer of hybrid
sorghum seed would be expected to produce if the acreage had been
planted to commercial field sorghum.
Coverage level factor. A factor contained in the Special Provisions
to adjust the county yield for commercial field sorghum to reflect the
higher value of hybrid sorghum seed.
Dollar value per bushel. An amount that determines the value of any
seed production to count. It is determined by dividing the amount of
insurance per acre by the result of multiplying the approved yield by
the coverage level percentage, expressed as a decimal.
Female parent plants. Sorghum plants that are grown for the purpose
of producing commercial hybrid sorghum seed and are male sterile.
Field run. Commercial hybrid sorghum seed production before it has
been processed or screened.
Good farming practices. In addition to the definition contained in
the Basic Provisions, good farming practices include those practices
required by the hybrid sorghum seed processor contract.
Harvest. Combining, threshing or picking of the female parent plants
to obtain commercial hybrid sorghum seed.
Hybrid sorghum seed processor contract. An agreement executed in
writing between the hybrid sorghum seed crop producer and a seed company
containing, at a minimum:
(a) The producer's promise to plant and grow male and female parent
plants, and to deliver all commercial hybrid sorghum seed produced from
such plants to the seed company;
(b) The seed company's promise to purchase the commercial hybrid
sorghum seed produced by the producer; and
(c) Either a fixed price per unit of measure (bushels,
hundredweight, etc.) of the commercial hybrid sorghum seed or a formula
to determine the value of such seed. Any formula for establishing the
value must be based on data provided by a public third party that
establishes or provides pricing information to the general public, based
on prices paid in the open market (e.g., commodity futures exchanges),
to be acceptable for the purpose of this policy.
Inadequate germination. Germination of less than 80 percent of the
commercial hybrid sorghum seed as determined by using a certified seed
test.
Insurable interest. Your share of the financial loss that occurs in
the event seed production is damaged by a cause of loss specified in
section 10.
Local market price. The cash price offered by buyers for any
production from the female parent plants that is not considered
commercial hybrid sorghum seed under the terms of this policy.
Male parent plants. Sorghum plants grown for the purpose of
pollinating female parent plants.
Minimum guaranteed payment. A minimum amount (usually stated in
dollars or bushels) specified in your hybrid sorghum seed processor
contract that will be paid or credited to you by the seed company
regardless of the quantity of seed produced.
Non-seed production. Production that does not qualify as seed
production because of inadequate germination.
Planted acreage. In addition to the definition contained in the
Basic Provisions, the insured crop must be planted in rows wide enough
to permit mechanical cultivation, unless provided by the Special
Provisions or by written agreement.
Planting pattern. The arrangement of the rows of the male and female
parent plants in a field. An example of a planting pattern is four
consecutive rows of female parent plants followed by two consecutive
rows of male parent plants.
[[Page 168]]
Practical to replant. In addition to the definition contained in the
Basic Provisions, practical to replant applies to either the female or
male parent plant. It will not be considered practical to replant unless
production from the replanted acreage can be delivered under the terms
of the hybrid sorghum seed processor contract, or the seed company
agrees that it will accept the production from the replanted acreage.
Prevented planting. In addition to the definition contained in the
Basic Provisions, prevented planting applies to the female and male
parent plants. The male parent plants must be planted in accordance with
the requirements of the hybrid sorghum seed processor contract to be
considered planted.
Sample. For the purpose of the certified seed test, at least 3
pounds of randomly selected field run sorghum seed for each type or
variety of commercial hybrid sorghum seed grown on the unit.
Seed company. A business enterprise that possesses all licenses for
marketing commercial hybrid sorghum seed required by the state in which
it is domiciled or operates, and which possesses facilities with enough
storage and drying capacity to accept and process the insured crop
within a reasonable amount of time after harvest. If the seed company is
the insured, it must also be a corporation.
Seed production. All seed produced by female parent plants with a
germination rate of at least 80 percent as determined by a certified
seed test.
Type. Grain sorghum, forage sorghum, or sorghum sudan parent plants.
Variety. The name, number or code assigned to a specific genetic
cross by the seed company or the Special Provisions for the insured crop
in the county.
2. Unit Division
(a) For any processor contract that stipulates the amount of
production to be delivered:
(1) In lieu of the definition of ``basic unit'' contained in the
Basic Provisions, a basic unit will consist of all acreage planted to
the insured crop in the county that will be used to fulfill a hybrid
sorghum seed processor contract;
(2) There will be no more than one basic unit for all production
contracted with each processor contract;
(3) In accordance with section 12, all production from any basic
unit in excess of the amount under contract will be included as
production to count if such production is applied to any other basic
unit for which the contracted amount has not been fulfilled; and
(4) Optional units will not be established.
(b) For any processor contract that stipulates a number of acres to
be planted, the provisions in the Basic Provisions that allow optional
units by irrigated and non-irrigated practices are not applicable.
3. Insurance Guarantees, Coverage Levels, and Prices for Determining
Indemnities
(a) In addition to the requirements of section 3 of the Basic
Provisions, you may select only one price election for all the hybrid
sorghum seed in the county insured under this policy unless the Special
Provisions provide different price elections by type or variety, in
which case you may elect one price election for each hybrid sorghum seed
type or variety designated in the Special Provisions. The price election
you choose for each type or variety must have the same percentage
relationship to the maximum price offered by us for each type or
variety. For example, if you choose 100 percent of the maximum price
election for one specific type or variety, you must also choose 100
percent of the maximum price election for all other types or varieties.
(b) The production reporting requirements contained in section 3 of
the Basic Provisions are not applicable to this contract.
4. Contract Changes
In accordance with section 4 of the Basic Provisions, the contract
change date is November 30 preceding the cancellation date.
5. Cancellation and Termination Dates
In accordance with section 2 of the Basic Provisions, the
cancellation and termination dates are March 15.
6. Report of Acreage
In addition to the requirements of section 6 of the Basic
Provisions, you must:
(a) Report by type and variety, the location and insurable acreage
of the insured crop;
(b) Report any acreage that is uninsured, including that portion of
the total acreage occupied by male parent plants; and
(c) Certify that you have a hybrid sorghum seed processor contract
and report the amount, if any, of any minimum guaranteed payment.
7. Insured Crop
(a) In accordance with section 8 of the Basic Provisions, the crop
insured will be all the female parent plants in the county for which a
premium rate is provided by the actuarial documents:
(1) In which you have a share;
(2) That are grown under a hybrid sorghum seed processor contract
executed before the acreage reporting date;
(3) That are planted for harvest as commercial hybrid sorghum seed
in accordance with the requirements of the hybrid sorghum seed processor
contract and the production
[[Page 169]]
management practices of the seed company; and
(4) That are not (unless allowed by the Special Provisions or by
written agreement):
(i) Planted with a mixture of female and male parent seed in the
same row;
(ii) Planted for any purpose other than for commercial hybrid
sorghum seed;
(iii) Interplanted with another crop; or
(iv) Planted into an established grass or legume.
(b) An instrument in the form of a ``lease'' under which you retain
control of the acreage on which the insured crop is grown and that
provides for delivery of the crop under substantially the same terms as
a hybrid sorghum seed processor contract will be treated as a contract
under which you have an insurable interest in the crop.
(c) A commercial hybrid sorghum seed producer who is also a
commercial hybrid sorghum seed company may be able to insure the hybrid
sorghum seed crop if the following requirements are met:
(1) The seed company has an insurable interest in the hybrid sorghum
seed crop;
(2) Prior to the sales closing date, the Board of Directors of the
seed company has executed and adopted a corporate resolution containing
the same terms as an acceptable hybrid sorghum seed processor contract.
This corporate resolution will be considered a contract under the terms
of this policy;
(3) Sales records for at least the previous years' seed production
must be provided to confirm that the seed company has produced and sold
seed. If such records are not available, the crop may be insured under
the Coarse Grains Crop Provisions with a written agreement; and
(4) Our inspection reveals that the storage and drying facilities
satisfy the definition of a seed company.
(d) Any of the insured crop that is under contract with different
seed companies may be insured under separate policies with different
insurance providers provided all acreage of the insured crop in the
county is insured. If you elect to insure the insured crop with
different insurance providers, you agree to pay separate administrative
fees for each insurance policy.
8. Insurable Acreage
In addition to the provisions of section 9 of the Basic Provisions,
we will not insure any acreage of the insured crop:
(a) Planted and occupied exclusively by male parent plants;
(b) Not in compliance with the rotation requirements contained in
the Special Provisions or, if applicable, required by the hybrid sorghum
seed processor contract; or
(c) If either the female or male parent plants are damaged before
the final planting date and we determine that insured crop is practical
to replant but it is not replanted.
9. Insurance Period
(a) In addition to the provisions of section 11 of the Basic
Provisions, insurance attaches upon completion of planting of:
(1) The female parent plant seed on or before the final planting
date designated in the Special Provisions, except as allowed in section
16 of the Basic Provisions; and
(2) The male parent plant seed.
(b) In accordance with the provisions of section 11 of the Basic
Provisions, the calendar date for the end of the insurance period is the
November 30 immediately following planting.
10. Causes of Loss
(a) In accordance with the provisions of section 12 of the Basic
Provisions, insurance is provided only against the following causes of
loss that occur during the insurance period:
(1) Adverse weather conditions;
(2) Fire;
(3) Insects, but not damage due to insufficient or improper
application of pest control measures;
(4) Plant disease, but not damage due to insufficient or improper
application of disease control measures;
(5) Wildlife;
(6) Earthquake;
(7) Volcanic eruption; or
(8) Failure of the irrigation water supply, if due to a cause of
loss contained in section 10(a) (1) through (7) that occurs during the
insurance period.
(b) In addition to the causes of loss excluded by section 12 of the
Basic Provisions, we will not insure against any loss of production due
to:
(1) The use of unadapted, incompatible, or genetically deficient
male or female parent plant seed;
(2) Frost or freeze after the date set by the Special Provisions;
(3) Failure to follow the requirements stated in the hybrid sorghum
seed processor contract and production management practices of the seed
company;
(4) Inadequate germination, even if resulting from an insured cause
of loss, unless you have provided adequate notice as required by section
11(b)(1); or
(5) Failure to plant the male parent plant seed at a time or in a
manner sufficient to assure adequate pollination of the female parent
plants, unless you are prevented from planting the male parent plant
seed by an insured cause of loss.
11. Duties in the Event of Damage or Loss
(a) In accordance with the requirements of section 14 of the Basic
Provisions, you must leave representative samples of at least one
complete planting pattern of the male and
[[Page 170]]
female parent plant rows that extend the entire length of each field in
the unit. If you are going to destroy any acreage of the insured crop
that will not be harvested, the samples must not be destroyed until
after our inspection.
(b) In addition to the requirements of section 14 of the Basic
Provisions:
(1) You must give us notice of probable loss at least 15 days before
the beginning of harvest if you anticipate inadequate germination on any
unit; and
(2) You must provide a completed copy of your hybrid sorghum seed
processor contract unless we have determined it has already been
provided by the seed company, and the seed company certifies that such
contract is used for all its producers without any waivers or
amendments.
12. Settlement of Claim
(a) We will determine your loss on a unit basis. In the event you
are unable to provide separate acceptable production records:
(1) For any optional units, we will combine all optional units for
which such production records were not provided; or
(2) For any basic units, we will allocate any commingled production
to such units in proportion to our liability on the harvested acreage
for the units.
(b) You will not receive an indemnity payment on a unit if the seed
company refuses to provide us with records we require to determine the
dollar value per bushel of production for each variety.
(c) In the event of loss or damage covered by this policy, we will
settle your claim on any unit by:
(1) Multiplying the insured acreage by its respective amount of
insurance per acre, by type and variety if applicable;
(2) Totaling the results of section 12(c)(1) if there are more than
one type or variety;
(3) Multiplying the total seed production to count (see section
12(d)) for each type and variety of commercial hybrid sorghum seed by
the applicable dollar value per bushel for that type or variety;
(4) Multiplying the total non-seed production to count (see section
12(e)) for each type and variety by the applicable local market price
determined on the earlier of the date the non-seed production is sold or
the date of final inspection;
(5) Totaling the results of sections 12(c)(3) and 12(c)(4) by type
and variety;
(6) Subtracting the result of section 12(c)(5) from the result of
section 12(c)(1) if there is only one type or variety, or subtracting
the result of 12(c)(5) from the result of section 12(c)(2) if there are
more than one type or variety; and
(7) Multiplying the result of section 12(c)(6) by your share.
For example:
You have a 100 percent share in 50 acres insured for the development
of type ``A'' hybrid sorghum seed in the unit, with an amount of
insurance per acre guarantee of $361 (county yield of 170 bushels times
a coverage level factor of .867 for the 65 percent coverage level, times
a price election of $2.45 per bushel, minus the minimum guaranteed
payment of zero). Your seed production was 1,400 bushels and the dollar
value per bushel was $3.47. Your non-seed production was 100 bushels
with a local market value of $2.00 per bushel. Your indemnity would be
calculated as follows:
(1) 50 acres x $361 = $18,050 amount of insurance guarantee;
(3) 1,400 bushels x $3.47 = $4,858 value of seed production;
(4) 100 bushels of non-seed x $2.00 = $200 of non-seed production;
(5) $4,858 + $200 = $5,058;
(6) $18,050 - $5,058 = $12,992; and
(7) $12,992 x 100 percent share = $12,992 indemnity payment.
You also have a 100 percent share in 50 acres insured for the
development of type ``B'' hybrid sorghum seed in the unit, with an
amount of insurance per acre guarantee of $340 (county yield of 160
bushels times a coverage level factor of .867 for the 65 percent
coverage level, times a price election of $2.45 per bushel, minus the
minimum guaranteed payment of zero). You harvested 1,200 bushels and the
dollar value per bushel for the harvested amount was $4.63. You also
harvested 200 bushels of non-seed with a market value of $2.00 per
bushel. Your indemnity would be calculated as follows:
(1) 50 acres x $361 = $18,050 amount of insurance guarantee for type
``A'' and 50 acres x $340 = $17,000 amount of insurance guarantee for
type ``B'';
(2) $18,050 + $17,000 = $35,050 amount of insurance guarantee;
(3) 1,400 bushels x $3.47 = $4,858 value of seed production for type
``A'' and 1,200 bushels x $4.63 = $5,556 value of seed production for
type ``B'';
(4) 100 bushels of non-seedx$2.00 = $200 of non-seed production for
type ``A'' and 200 bushels of non-seed x $2.00 = $400 of non-seed
production for type ``B''
(5) $4,858 + $200 + $5,556 + $400 = $11,014 value of production to
count;
(6) $35,050 - $11,014 = $24,036; and
(7) $24,036 x 100 percent share = $24,036 indemnity payment.
(d) Production to be counted as seed production will include:
(1) All appraised production as follows:
(i) Not less than the amount of insurance per acre for acreage:
(A) That is abandoned;
(B) Put to another use without our consent;
(C) That is damaged solely by uninsured causes; or
[[Page 171]]
(D) For which you fail to provide acceptable production records;
(ii) Production lost due to uninsured causes;
(iii) Mature unharvested production with a germination rate of at
least 80 percent of the commercial hybrid sorghum seed as determined by
a certified seed test. Any such production may be adjusted in accordance
with section 12(f);
(iv) Immature appraised production;
(v) Potential production on insured acreage that you intend to put
to another use or abandon, if you and we agree on the appraised amount
of production. Upon such agreement, the insurance period for that
acreage will end when you put the acreage to another use or abandon the
crop. If agreement on the appraised amount of production is not reached:
(A) If you do not elect to continue to care for the crop, we may
give you consent to put the acreage to another use if you agree to leave
intact, and provide sufficient care for, representative samples of the
crop in locations acceptable to us (The amount of production to count
for such acreage will be based on the harvested production or appraisals
from the samples at the time harvest should have occurred. If you do not
leave the required samples intact, or fail to provide sufficient care
for the samples, our appraisal made prior to giving you consent to put
the acreage to another use will be used to determine the amount of
production to count); or
(B) If you elect to continue to care for the crop, the amount of
production to count for the acreage will be the harvested production, or
our reappraisal if additional damage occurs and the crop is not
harvested; and
(2) Harvested production that you deliver as commercial hybrid
sorghum seed to the seed company stated in your hybrid sorghum seed
processor contract, regardless of quality, unless the production has
inadequate germination.
(e) Production to be counted as non-seed production will include all
harvested or mature appraised production that does not qualify as seed
production to count as specified in section 12(d). Any such production
may be adjusted in accordance with section 12(f).
(f) For the purpose of determining the quantity of mature
production:
(1) Commercial hybrid sorghum seed production will be:
(i) Increased 0.12 percent for each 0.1 percentage point of moisture
below 13.0 percent; or
(ii) Decreased 0.12 percent for each 0.1 percentage point of
moisture in excess of 13.0 percent.
(2) When records of commercial hybrid sorghum seed production
provided by the seed company have been adjusted to a basis of 13.0
percent moisture and 56 pound avoirdupois bushels, section 12(f)(1)
above will not apply to harvested production. In such cases, records of
the seed company will be used to determine the amount of production to
count, provided that the moisture and weight of such production are
calculated on the same basis as that used to determine the approved
yield.
13. Prevented Planting
Your prevented planting coverage will be 60 percent of your amount
of insurance for timely planted acreage. If you have limited or
additional levels of coverage as specified in 7 CFR part 400, subpart T,
and pay an additional premium, you may increase your prevented planting
coverage to a level specified in the actuarial documents.
[62 FR 65318, Dec. 12, 1997]
Sec. 457.113 Coarse grains crop insurance provisions.
The coarse grains crop insurance provisions for the 2003 and
succeeding crop years are as follows:
United States Department of Agriculture
Federal Crop Insurance Corporation
Coarse Grains Crop Provisions
If a conflict exists among the policy provisions, the order of
priority is as follows: (1) The Catastrophic Risk Protection
Endorsement, if applicable; (2) the Special Provisions; (3) these Crop
Provisions; and (4) the Basic Provisions with (1) controlling (2), etc.
1. Definitions
Coarse grains-- Corn, grain sorghum, and soybeans.
Grain sorghum-- The crop defined as sorghum under the United States
Grain Standards Act.
Harvest-- Combining, threshing, or picking the insured crop for
grain, or cutting for hay, silage, or fodder.
Local market price-- The cash grain price per bushel for the U.S.
No. 2 yellow corn, U.S. No. 2 grain sorghum, or U.S. No. 1 soybeans,
offered by buyers in the area in which you normally market the insured
crop. The local market price will reflect the maximum limits of quality
deficiencies allowable for the U.S. No. 2 grade for yellow corn and
grain sorghum, or U.S. No. 1 grade for soybeans. Factors not associated
with grading under the Official United States Standards for Grain,
including but not limited to protein and oil, will not be considered.
Planted acreage--In addition to the definition contained in the
Basic Provisions, coarse grains must initially be planted in rows (corn
must be planted in rows far
[[Page 172]]
enough apart to permit mechanical cultivation), unless otherwise
provided by the Special Provisions, actuarial documents, or by written
agreement.
Production guarantee(per acre)--In lieu of the definition contained
in the Basic Provisions, the number of bushels (tons for corn insured a
silage) determined by multiplying the approved actual production history
(APH) yield per acre, calculated in accordance with 7 CFR part 400,
subpart G, by the coverage level percentage you elect.
Silage-- A product that results from severing the plant from the
land and chopping it for the purpose of livestock feed.
Ton-- Two thousand (2000) pounds avoirdupois.
2. Insurance Guarantees, Coverage Levels, and Prices for Determining
Indemnities
(a) In addition to the requirements of section 3 (Insurance
Guarantees, Coverage Levels, and Prices for Determining Indemnities) of
the Basic Provisions (Sec. 457.8) you may select:
(1) For grain sorghum and soybeans, only one price election for each
crop in the county insured under this policy; and
(2) For corn, only one price election for all the corn in the county
insured as grain under this policy, and only one price election for all
the corn in the county insured as silage under this policy. The price
elections you choose for grain and silage must have the same percentage
relationship to the maximum price election offered by us for grain and
silage. For example, if you choose one hundred percent (100%) of the
maximum grain price election and you also insure corn on a silage basis,
you must choose one hundred percent (100%) of the maximum silage price
election.
(b) For corn only, if you harvest the crop in a manner other than
the manner you reported (for example, you reported grain but harvested
as silage) and you did not select a price election for the type
harvested, we will assign a price election for the type harvested that
bears the same percentage relationship to the maximum price election you
selected for the type reported (for example, if you selected a grain
price election in the amount of eighty percent (80%) of the maximum
price election for grain and you did not select a silage price election,
we will assign a silage price election in the amount of eighty percent
(80%) of the maximum price election for silage specified in the Special
Provisions if you harvest for silage). This assigned price election will
be used only to determine the dollar value of production to count for
indemnity purposes and will not be used to determine the amount of
insurance or premium.
3. Contract Changes
The contract change date is November 30 (December 17 for the 1998
crop year only) preceding the cancellation date (see the provisions of
Section 4 (Contract Changes) of the Basic Provisions).
4. Cancellation and Termination Dates
In accordance with section 2 of the Basic Provisions (Sec. 457.8),
the cancellation and termination dates are:
------------------------------------------------------------------------
Cancellation and
State and county termination dates
------------------------------------------------------------------------
(a) For corn and grain sorghum:
Val Verde, Edwards, Kerr, Kendall, Bexar, January 15.
Wilson, Karnes, Goliad, Victoria, and
Jackson Counties, Texas, and all Texas
counties lying south thereof.
El Paso, Hudspeth, Culberson, Reeves, February 15.
Loving, Winkler, Ector, Upton, Reagan,
Sterling, Coke, Tom Green, Concho,
McCulloch, San Saba, Mills, Hamilton,
Bosque, Johnson, Tarrant, Wise, Cooke
Counties, Texas, and all Texas counties
lying south and east thereof to and
including Terrell, Crockett, Sutton,
Kimble, Gillespie, Blanco, Comal,
Guadalupe, Gonzales, De Witt, Lavaca,
Colorado, Wharton, and Matagorda Counties,
Texas.
Alabama; Arizona; Arkansas; California; February 28.
Florida; Georgia; Louisiana; Mississippi;
Nevada; North Carolina; and South Carolina.
All other Texas counties and all other March 15.
states.
(b) For soybeans:
Jackson, Victoria, Goliad, Bee, Live Oak, February 15.
McMullen, LaSalle, and Dimmit Counties,
Texas and all Texas counties lying south
thereof.
Alabama; Arizona; Arkansas; California; February 28.
Florida; Georgia; Louisiana; Mississippi;
Nevada; North Carolina; and South Carolina;
and El Paso, Hudspeth, Culberson, Reeves,
Loving, Winkler, Ector, Upton, Reagan,
Sterling, Coke, Tom Green, Concho,
McCulloch, San Saba, Mills, Hamilton,
Bosque, Johnson, Tarrant, Wise, Cooke
Counties, Texas, and all Texas counties
lying south and east thereof to and
including Maverick, Zavala, Frio, Atascosa,
Karnes, De Witt, Lavaca, Colorado, Wharton,
and Matagorda Counties, Texas.
All other Texas counties and all other March 15.
states.
------------------------------------------------------------------------
5. Insured Crop
(a) In accordance with section 8 (Insured Crop) of the Basic
Provisions (Sec. 457.8), the crop insured will be each coarse grain
crop you elect to insure for which premium rates are provided by the
actuarial documents:
[[Page 173]]
(1) In which you have a share;
(2) That is adapted to the area based on days to maturity and is
compatible with agronomic and weather conditions in the area; and
(3) That is not (unless allowed by the Special Provisions or by
written agreement):
(i) Interplanted with another crop except as allowed in paragraph
5(b)(1); or
(ii) Planted into an established grass or legume.
(b) For corn only, in addition to the provisions of subsection 5(a),
the corn crop insured will be all corn that is:
(1) Planted for harvest either as grain or as silage (see subsection
5(c)). A mixture of corn and sorghum (grain or forage-type) will be
insured as corn silage if the sorghum does not constitute more than
twenty percent (20%) of the plants;
(2) Yellow dent or white corn, including mixed yellow and white,
waxy or high-lysine corn, and excluding:
(i) High-amylose, high-oil, high-protein, flint, flour, Indian, or
blue corn, or a variety genetically adapted to provide forage for
wildlife or any other open pollinated corn, unless a written agreement
allows insurance of such excluded crops.
(ii) A variety of corn adapted for silage use only when the corn is
reported for insurance as grain.
(c) For corn only, if the actuarial documents for the county provide
a premium rate for:
(1) Both grain and silage, all insurable acreage will be insured as
the type or types reported by you on or before the acreage reporting
date;
(2) Grain but not silage, all insurable acreage will be insured as
grain unless a written agreement allows insurance on all or a portion of
the insurable acreage as silage; or
(3) Silage but not grain, all insurable corn acreage will be insured
as silage unless a written agreement allows insurance on all or a
portion of the insurable acreage as grain.
(d) For grain sorghum only, in addition to the provisions of
subsection 5(a), the grain sorghum crop insured will be all of the grain
sorghum in the county:
(1) That is planted for harvest as grain;
(2) That is a combine-type hybrid grain sorghum (grown from hybrid
seed); and
(3) That is not a dual-purpose type of grain sorghum (a type used
for both grain and forage), unless a written agreement allows insurance
of such grain sorghum.
(e) For soybeans only, in addition to the provisions of subsection
5(a), the soybean crop insured will be all of the soybeans in the county
that are planted for harvest as beans.
6. Insurable Acreage
In addition to the provisions of section 9 of the Basic Provisions,
any acreage of the insured crop damaged before the final planting date,
to the extent that a majority of producers in the area would not
normally further care for the crop, must be replanted unless we agreee
that it is not practical to replant.
7. Insurance Period
In accordance with the provisions under section 11 (Insurance
Period) of the Basic Provisions (Sec. 457.8), the calendar date for the
end of the insurance period is the date immediately following planting
as follows:
(a) For corn insured as grain:
(1) Val Verde, Edwards, Kerr, Kendall, September 30.
Bexar, Wilson, Karnes, Goliad, Victoria,
and Jackson Counties, Texas, and all Texas
counties lying south thereof.
(2) Clark, Cowlitz, Grays Harbor, Island, October 31.
Jefferson, King, Kitsap, Lewis, Pierce,
Skagit, Snohomish, Thurston, Wahkiakum, and
Whatcom Counties, Washington.
(3) All other counties and states........... December 10.
(b) For corn insured as silage:
All states.................................. September 30.
(c) For grain sorghum:
(1) Val Verde, Edwards, Kerr, Kendall, September 30.
Bexar, Wilson, Karnes, Goliad, Victoria,
and Jackson Counties, Texas, and all Texas
counties lying south thereof.
(2) All other Texas counties and all other December 10.
states.
(d) For soybeans: All states.................. December 10.
8. Causes of Loss
In accordance with the provisions of section 12 (Causes of Loss) of
the Basic Provisions (Sec. 457.8), insurance is provided only against
the following causes of loss which occur within the insurance period:
(a) Adverse weather conditions;
(b) Fire;
(c) Insects, but not damage due to insufficient or improper
application of pest control measures;
(d) Plant disease, but not damage due to insufficient or improper
application of disease control measures;
(e) Wildlife;
(f) Earthquake;
(g) Volcanic eruption; or
[[Page 174]]
(h) Failure of the irrigation water supply, if applicable, due to an
unavoidable cause of loss occurring within the insurance period.
9. Replanting Payments
(a) In accordance with section 13 of the Basic Provisions,
replanting payments for coarse grains are allowed if the coarse grains
are damaged by an insurable cause of loss to the extent that the
remaining stand will not produce at least 90 percent of the production
guarantee for the acreage and it is practical to replant.
(b) The maximum amount of the replanting payment per acre will be
the lesser of twenty percent (20%) of the production guarantee or the
number of bushels (tons for corn insured as silage) set out herein,
multiplied by your price election multiplied by your insured share or
the share determined under 9(c), if applicable. The number of bushels or
tons are 8 bushels for corn grain; 1 ton for corn silage; 7 bushels for
grain sorghum; and 3 bushels for soybeans.
(c) When more than one person insures the same crop on a share
basis, a replanting payment based on the total shares insured by us may
be made to the insured person who incurs the total cost of replanting.
Payment will be made in this manner only if an agreement exists between
the insured persons which:
(1) Requires one person to incur the entire cost of replanting; or
(2) Gives the right to all replanting payments to one person.
(d) When the insured crop is replanted using a practice that is
uninsurable as an original planting, the liability for the unit will be
reduced by the amount of the replanting payment which is attributable to
your share. The premium amount will not be reduced.
10. Duties in the Event of Damage or Loss
(a) In accordance with the requirements of section 14 (Duties in the
Event of Damage or Loss) of the Basic Provisions (Sec. 457.8), if you
initially discover damage to any insured crop within 15 days of or
during harvest, you must leave representative samples of the unharvested
crop for our inspection. The samples must be at least 10 feet wide and
extend the entire length of each field in the unit, and must not be
harvested or destroyed until the earlier of our inspection or 15 days
after harvest of the balance of the unit is completed.
(b) For any corn unit that has separate dates for the end of the
insurance period (grain and silage):
(1) In lieu of paragraph 14.(a)(2) of the Basic Provisions (Sec.
457.8), if damage occurs:
(i) Before the earliest end of insurance period date (grain or
silage), you must give us notice within 72 hours of your initial
discovery of damage (but not later than 15 days after that earliest end
of insurance period date); or
(ii) If damage does not occur before the earliest end of insurance
period date (grain or silage), but occurs before the latest end of
insurance period date (grain or silage), you must give notice within 72
hours of your initial discovery of damage (but not later than 15 days
after that latest end of insurance period date).
(2) In lieu of subsection 14.(c) of the Basic Provisions (Sec.
457.8), in addition to complying with all other notice requirements, you
must submit a claim for indemnity declaring the amount of your loss not
later than 60 days after the latest date for the end of insurance period
for the unit. This claim must include all the information we require to
settle the claim.
11. Settlement of Claim
(a) We will determine your loss on a unit basis. In the event you
are unable to provide records of production:
(1) For any optional unit, we will combine all optional units for
which acceptable records of production were not provided; or
(2) For any basic unit, we will allocate any commingled production
to such units in proportion to our liability on the harvested acreage
for each unit.
(b) In the event of loss or damage covered by this policy, we will
settle your claim on any unit:
(1) For grain sorghum and soybeans by:
(i) Multiplying the insured acreage by the production guarantee;
(ii) Subtracting from this the total production to count;
(iii) Multiplying the remainder by your price election; and
(iv) Multiplying this result by your share.
(2) For corn by:
(i) Multiplying the insured acreage of each type (grain/silage) by
the production guarantee for the applicable type;
(ii) Multiplying each result by the price election for the
applicable type;
(iii) Adding these values;
(iv) Multiplying the production to count of each type (see
subsection 11(d)) by the price election for that type (see the
provisions under section 2 (Insurance Guarantees, Coverage Levels, and
Prices for Determining Indemnities));
(v) Adding these dollar values;
(vi) Subtracting the result of step (v) from the result of step
(iii); and
(vii) Multiplying the result by your share.
(c) The total production in bushels (tons for corn silage) (see
subsection 11(d)) to count from all insurable acreage on the unit will
include:
(1) All appraised production as follows:
(i) Not less than the production guarantee for acreage:
[[Page 175]]
(A) That is abandoned;
(B) Put to another use without our consent;
(C) Damaged solely by uninsured causes; or
(D) For which you fail to provide records of production that are
acceptable to us;
(ii) Production lost due to uninsured causes;
(iii) Unharvested production (mature unharvested production may be
adjusted for quality deficiencies and excess moisture in accordance with
subsection 11(e)); and
(iv) Potential production on insured acreage you want to put to
another use or you wish to abandon and no longer care for, if you and we
agree on the appraised amount of production. Upon such agreement the
insurance period for that acreage will end if you put the acreage to
another use or abandon the crop. If agreement on the appraised amount of
production is not reached:
(A) If you do not elect to continue to care for the crop we may give
you consent to put the acreage to another use if you agree to leave
intact, and provide sufficient care for, representative samples of the
crop in locations acceptable to us (The amount of production to count
for such acreage will be based on the harvested production or appraisals
from the samples at the time harvest should have occurred. If you do not
leave the required samples intact, or you fail to provide sufficient
care for the samples, our appraisal made prior to giving you consent to
put the acreage to another use will be used to determine the amount of
production to count); or
(B) If you elect to continue to care for the crop, the amount of
production to count for the acreage will be the harvested production, or
our reappraisal if additional damage occurs and the crop is not
harvested; and
(2) All harvested production from the insurable acreage.
(d) The production to count for corn will be in bushels for grain
and in tons for silage as follows:
(1) For harvested acreage, according to the method of harvest; and
(2) For unharvested acreage, according to the information contained
on your acreage report;
except as otherwise provided in paragraph 11(c)(1).
(e) Mature coarse grain production (excluding corn insured or
harvested as silage) may be adjusted for excess moisture and quality
deficiencies. If moisture adjustment is applicable it will be made prior
to any adjustment for quality. Corn insured or harvested as silage will
be adjusted for excess moisture and quality only as specified in
subsection 11(f).
(1) Production will be reduced by 0.12 percent for each 0.1
percentage point of moisture in excess of:
(i) Fifteen percent (15%) for corn (If moisture exceeds 30 percent
(30%), production will be reduced 0.2 percent for each 0.1 percentage
point above 30 percent (30%));
(ii) Fourteen percent (14%) for grain sorghum; and
(iii) Thirteen percent (13%) for soybeans.
We may obtain samples of the production to determine the moisture
content.
(2) Production will be eligible for quality adjustment if:
(i) Deficiencies in quality, in accordance with the Official United
States Standards for Grain, result in:
(A) Corn not meeting the grade requirements for U.S. No. 4 (grades
U.S. No. 5 or worse) because of test weight or kernel damage (excluding
heat damage) or having a musty, sour, or commercially objectionable
foreign odor;
(B) Grain sorghum not meeting the grade requirements for U.S. No. 4
(grades U.S. Sample grade) because of test weight or kernel damage
(excluding heat damage) or having a musty, sour, or commercially
objectionable foreign odor (except smut odor), or meets the special
grade requirements for smutty grain sorghum; or
(C) Soybeans not meeting the grade requirements for U.S. No. 4
(grades U.S. Sample grade) because of test weight or kernel damage
(excluding heat damage) or having a musty, sour, or commercially
objectionable foreign odor (except garlic odor), or which meet the
special grade requirements for garlicky soybeans; or
(ii) Substances or conditions are present that are identified by the
Food and Drug Administration or other public health organizations of the
United States as being injurious to human or animal health.
(3) Quality will be a factor in determining your loss only if:
(i) The deficiencies, substances, or conditions resulted from a
cause of loss against which insurance is provided under these crop
provisions;
(ii) All determinations of these deficiencies, substances, or
conditions are made using samples of the production obtained by us or by
a disinterested third party approved by us;
(iii) With regard to deficiencies in quality (except test weight,
which may be determined by our loss adjuster), the samples are analyzed
by:
(A) A grain grader licensed under the United States Grain Standards
Act or the United States Warehouse Act;
(B) A grain grader licensed under State law and employed by a
warehouse operator who has a storage agreement with the Commodity Credit
Corporation; or
(C) A grain grader not licensed under State law, but who is employed
by a warehouse operator who has a commodity storage agreement with the
Commodity Credit Corporation and is in compliance with State law
regarding warehouses; and
[[Page 176]]
(iv) With regard to substances or conditions injurious to human or
animal health, the samples are analyzed by a laboratory approved by us.
(4) Coarse grain production that is eligible for quality adjustment,
as specified in paragraphs 11.(e) (2) and (3), will be reduced by the
quality adjustment factor contained in the Special Provisions.
(f) For corn insured or harvested as silage:
(1) Whenever our appraisal of grain content is less than 4.5 bushels
of grain per ton of silage, the silage production will be reduced by 1
percentage point for each 0.1(1/10) of a bushel less than 4.5 bushels
per ton (If we cannot make a grain appraisal before harvest and you do
not leave a representative unharvested sample, in accordance with the
policy no reduction for grain-deficient silage will be made.); and
(2) If the normal silage harvesting period has ended, or for any
acreage harvested as silage or appraised as silage after September 30 of
the crop year we may increase the silage production to count to 65
percent (65%) moisture equivalent to reflect the normal moisture content
of silage harvested during the normal silage harvesting period.
(g) Any production harvested from plants growing in the insured crop
may be counted as production of the insured crop on a weight basis.
12. Prevented Planting
Your prevented planting coverage will be 60 percent of your
production guarantee for timely planted aceage. if you have limited or
additional levels of coverage, as specified in 7 CFR part 400, subpart
T, and pay an additional premium, you may increase your prevented
planting coverage to a level specified in the actuarial documents.
[59 FR 49161, Sept. 27, 1994; 59 FR 60063, Nov. 22, 1994, as amended at
60 FR 62728, 62729, Dec. 7, 1995; 62 FR 63633, Dec. 2, 1997; 62 FR
65168, Dec. 10, 1997; 67 FR 55690, Aug. 30, 2002]
Sec. Sec. 457.114-457.115 [Reserved]
Sec. 457.116 Sugarcane crop insurance provisions.
The Sugarcane Crop Insurance Provisions for the 2004 and succeeding
crop years are as follows:
United States Department of Agriculture
Federal Crop Insurance Corporation
Sugarcane Crop Provisions
If a conflict exists among the policy provisions, the order of
priority is as follows: (1) The Catastrophic Risk Protection
Endorsement, if applicable; (2) the Special Provisions; (3) these Crop
Provisions; and (4) the Basic Provisions with (1) controlling (2), etc.
1. Definitions
Crop year--The period within which the insured sugarcane is normally
grown and designated by the calendar year in which the harvest of
sugarcane normally begins in the county.
Harvest--Cutting and removing the mature sugarcane from the field.
Irrigated practice--A method of producing a crop by which water is
artificially applied during the growing season by appropriate systems
and at the proper times, with the intention of providing the quantity of
water needed to produce at least the yield used to establish the
irrigated production guarantee on the irrigated acreage planted to the
insured crop.
Local market price--The price per pound for raw sugar offered by
buyers in the area in which you normally market the sugarcane.
Plant cane--The insured crop which grows from seed planted for the
crop year.
Stubble cane--The insured crop which grows from the stubble of
sugarcane that was harvested the previous crop year.
Sugarcane. The grass, Saccharum officinarum, that is grown to
produce sugar.
2. Insurance Guarantees, Coverage Levels, and Prices for Determining
Indemnities
(a) In addition to the requirements of section 3 (Insurance
Guarantees, Coverage Levels, and Prices for Determining Indemnities) of
the Basic Provisions (Sec. 457.8), you may select only one price
election for all the sugarcane in the county insured under this policy.
(b) Instead of reporting your sugarcane production for the previous
crop year as required by subsection 3.(c) of the Basic Provisions (Sec.
457.8), there is a lag period of one year and you are required to report
production from two crop years previously, e.g., 1994 crop year
production must be reported by the required date for the 1996 crop year.
3. Contract Changes
In accordance with section 4 of the Basic Provisions (Sec. 457.8),
the contract change date is June 30 preceding the cancellation date.
4. Cancellation and Termination Dates
In accordance with section 2 of the Basic Provisions (Sec. 457.8),
the cancellation and termination dates are September 30.
5. Insured Crop
(a) In accordance with section 8 of the Basic Provisions (Sec.
457.8), the crop insured will be all the sugarcane in the county for
which a premium rate is provided by the actuarial documents:
(1) In which you have a share;
(2) That is grown for processing for sugar or for seed; and
[[Page 177]]
(3) That is not interplanted with another crop, unless allowed by a
written agreement.
(b) In addition to the crop listed as not insured in section 8(b) of
the Basic Provisions (Sec. 457.8), we will not insure any sugarcane:
(1) That was damaged the previous crop year to the extent the
sugarcane is unable to produce the yield used to establish the
production guarantee for the unit for the current crop year; or
(2) That exceeds the age limitations (by variety, if applicable)
contained in the Special Provisions , unless we agree in writing to
insure such acreage. An agreement in writing will not be provided
unless, after an appraisal, we determine that the crop is able to
produce at least the yield used to establish the production guarantee
for the unit for the current crop year.
6. Insurable Acreage
Section 9(a)(3) of the Basic Provisions (Sec. 457.8), is not
applicable to the Sugarcane Crop Insurance Provisions.
7. Insurance Period
(a) In addition to the provisions of section 11 of the Basic
Provisions (Sec. 457.8), insurance attaches:
(1) On the later of the day we accept your application or at the
time of planting for plant cane;
(2) On the first day following harvest of the previous crop for
stubble cane except as contained in sections 7(a)(3) and (4);
(3) On the later of April 15 or 30 days following harvest of the
previous crop for stubble cane damaged during the previous crop year in
all states (except Louisiana); and
(4) On the later of April 30 or 30 days following harvest of the
previous crop for stubble cane damaged during the previous crop year in
Louisiana.
(b) In accordance with the provisions of section 11 of the Basic
Provisions (Sec. 457.8), the calendar date for the end of the insurance
period is:
(1) January 31 in Louisiana; and
(2) April 30 in all other states.
8. Causes of Loss
In accordance with the provisions of section 12 (Causes of Loss) of
the Basic Provisions (Sec. 457.8), insurance is provided only against
the following causes of loss that occur within the insurance period:
(a) Adverse weather conditions;
(b) Fire;
(c) Insects, but not damage due to insufficient or improper
application of pest control measures;
(d) Plant disease, but not damage due to insufficient or improper
application of disease control measures;
(e) Wildlife;
(f) Earthquake;
(g) Volcanic eruption; or
(h) Failure of the irrigation water supply, if applicable, due to an
unavoidable cause of loss occurring within the insurance period.
9. Duties in the Event of Damage or Loss or Cutting the Sugarcane for
Seed
(a) In addition to your duties under section 14 of the Basic
Provisions (Sec. 457.8), in the event of damage or loss:
(1) All sugarcane stubble must remain intact for our inspection; and
(2) You must give us notice at least 15 days before you begin
cutting any sugarcane for seed. Your notice must include the unit number
and the number of acres you intend to harvest as seed. Failure to give
us timely notice will cause the acreage cut for seed to be considered as
put to another use without consent. The production to count for such
acreage will not be less than the production guarantee.
(3) You must request an appraisal if any time during the crop year
sugarcane acreage cut for seed will not produce at least the production
guarantee so we can determine the production to count. If you do not
request an appraisal, the production to count for such acreage will be
the production guarantee.
(b) In accordance with the requirements of section 14 (Duties in the
Event of Damage or Loss) of the Basic Provisions (Sec. 457.8), if you
initially discover damage to any insured crop within 15 days of, or
during harvest, you must leave representative samples of the unharvested
crop for our inspection. The representative samples of the unharvested
crop must be at least 10 feet wide and extend the entire length of each
field in the unit. The stubble must not be destroyed and the required
samples must not be harvested until the earlier of our inspection or 15
days after harvest of the balance of the unit is completed.
10. Settlement of Claim
(a) We will determine your loss on a unit basis. In the event you
are unable to provide records of production:
(1) For any optional unit, we will combine all optional units for
which acceptable records of production were not provided; or
(2) For any basic unit, we will allocate any commingled production
to such units in proportion to our liability on the harvested acreage
for each unit.
(b) In the event of loss or damage covered by this policy, we will
settle your claim on any unit by:
(1) Multiplying the insured acreage by the production guarantee;
(2) Subtracting from this the total production to count;
(3) Multiplying the remainder by your price election; and
(4) Multiplying this result by your share.
[[Page 178]]
Example 1: Assume you have a 100 percent share in a unit of 100
acres of sugarcane, an approved yield of 6,000 pounds of raw sugar per
acre, a coverage election of 65 percent, and a price election of $0.12 a
pound. The production guarantee would be 3,900 pounds of raw sugar per
acre (6,000 x 65%). Further assume that you are only able to harvest
200,000 pounds of raw sugar because the unit was damaged by an insurable
cause of loss. Your indemnity would be calculated as follows:
(1) 100 acres x 3,900 pound production guarantee = 390,000 pound
production guarantee;
(2) 390,000 pound production guarantee-200,000 pounds harvested
production = 190,000 pound production loss;
(3) 190,000 pound production loss x $0.12 price election = $22,800
loss; and
(4) $22,800 loss x 100 percent share = $22,800 indemnity payment.
Example 2: Assume the same set of facts. Also, assume that you cut
20 acres of this unit for seed without giving notice that you were
cutting this acreage for seed and that you are only able to harvest
200,000 pounds from the remaining 80 acres. Your indemnity would be
calculated as follows:
(1) 100 acres x 3,900 pound production guarantee = 390,000 pound
production guarantee;
(2) 390,000 pound production guarantee-278,000 (200,000 pounds
harvested production + 78,000 pounds production for putting acreage to
another use without consent, (20 acres x 3,900 pound production
guarantee per acre)) = 112,000 pound production loss;
(3) 112,000 pound production loss x $0.12 price election = $13,440
loss; and
(4) $13,440 loss x 100 percent share = $13,440 indemnity payment.
(c) The total production (pounds of sugar) to count from all
insurable acreage on the unit will include:
(1) All appraised production as follows:
(i) Not less than the production guarantee for acreage:
(A) That is abandoned;
(B) Put to another use without our consent;
(C) Damaged solely by uninsured causes;
(D) For which you fail to provide records of production that are
acceptable to us; or
(E) On which the sugarcane stubble is destroyed within 15 days after
harvest is completed without our consent;
(ii) Production lost due to uninsured causes;
(iii) Unharvested production;
(iv) Potential production on insured acreage harvested for seed (see
section 9(a)(3));
(v) Potential production on insured acreage you want to put to
another use or you wish to abandon and no longer care for, if you and we
agree on the appraised amount of production. Upon such agreement, the
insurance period for that acreage will end if you put the acreage to
another use or abandon the crop. If agreement on the appraised amount of
production is not reached:
(A) If you do not elect to continue to care for the crop, we may
give you consent to put the acreage to another use if you agree to leave
intact, and provide sufficient care for, representative samples of the
crop in locations acceptable to us. (The amount of production to count
for such acreage will be based on the harvested production or appraisals
from the samples at the time harvest should have occurred. If you do not
leave the required samples intact, or you fail to provide sufficient
care for the samples, our appraisal made prior to giving you consent to
put the acreage to another use will be used to determine the amount of
production to count.); or
(B) If you elect to continue to care for the crop, the amount of
production to count for the acreage will be the harvested production, or
our reappraisal if additional damage occurs and the crop is not
harvested; and
(2) All harvested production from insurable acreage. Final records
of sugar production will be used to determine the amount of production
to count. Preliminary mill estimates will not be used.
(d) Harvested sugarcane may be adjusted for low quality if it is
damaged by one or more freezes occurring within the insurance period to
the extent that it cannot be processed for sugar by the boiling house
operation. The amount of production to count for such sugarcane will be
determined by dividing the dollar value of the damaged production by the
local market price per pound for raw sugar. The prices used for this
adjustment will be determined on the earlier of the date such quality-
adjusted production is sold or the date of final inspection for the
unit.
11. Late and Prevented Planting
The late and prevented planting provisions of the Basic Provisions
are not applicable.
[60 FR 25602, May 12, 1995, as amended at 62 FR 65169, Dec. 10, 1997; 67
FR 46095, July 12, 2002; 67 FR 52841, Aug. 14, 2002]
Sec. 457.117 Forage production crop insurance provisions.
The Forage Production Crop Insurance Provisions for the 2001 and
succeeding crop years are as follows:
FCIC Policies
Department of Agriculture
Federal Crop Insurance Corporation
Reinsured Policies
(Appropriate title for insurance provider)
Both FCIC and Reinsured Policies
[[Page 179]]
Forage Production Crop Insurance Provisions
If a conflict exists among the policy provisions, the order of
priority is as follows: (1) The Catastrophic Risk Protection
Endorsement, if applicable; (2) the Special Provisions; (3) these Crop
Provisions; and (4) the Basic Provisions with (1) controlling (2), etc.
1. Definitions
Adequate stand--A population of live forage plants that equals or
exceeds the minimum required number of plants per square foot as shown
in the Special Provisions.
Air-dry forage--Forage that has dried in windrows by natural means
to less than 13 percent moisture before being put into stacks or bales.
Crop year--The period from the date insurance attaches until harvest
is normally completed, which is designated by the calendar year in which
the majority of the forage is normally harvested.
Cutting. The severance of the forage plant from its roots.
Direct marketing. Sale of the forage crop directly to consumers
without the intervention of an intermediary such as a wholesaler,
shipper, buyer, or broker. An example of direct marketing is selling
directly to other producers.
Fall planted. A forage crop seeded after June 30.
Forage--Planted perennial alfalfa, perennial red clover, perennial
grasses, or a mixture thereof, or other species as shown in the
Actuarial Documents.
Harvest--Removal of forage from the windrow or field. Grazing will
not be considered harvested.
Spring planted. A forage crop seeded before July 1.
Ton--Two thousand (2,000) pounds avoirdupois.
Windrow. Forage that is cut and placed in a row.
Year of establishment--The period between seeding and when the
forage crop has developed an adequate stand. Insurance during the year
of establishment may be available under the forage seeding policy.
Insurance under this policy does not attach until after the year of
establishment. The year of establishment is determined by the date of
seeding. The year of establishment for spring planted forage is
designated by the calendar year in which seeding occurred. The year of
establishment for fall planted forage is designated by the calendar year
after the year in which the crop was planted.
2. Insurance Guarantees, Coverage Levels, and Prices for Determining
overage Levels, and Prices for Determining Indemnities
In addition to the requirements of section 3 (Insurance Guarantees,
Coverage Levels, and Prices for Determining Indemnities) of the Basic
Provisions (Sec. 457.8):
(a) You may only select one price election for all the forage in the
county insured under this policy unless the Special Provisions provide
different price elections by type, in which case you may select one
price election for each forage type designated in the Special
Provisions. The price elections you choose for each type must have the
same percentage relationship to the maximum price offered by us for each
type. For example, if you choose 100 percent of the maximum price
election for a specific type, you must also choose 100 percent of the
maximum price election for all other types.
(b) You must report the total production harvested from insurable
acreage for all cuttings for each unit by the production reporting date.
(c) Separate guarantees will be determined by forage type, as
applicable.
3. Contract Changes
In accordance with section 4 (Contract Changes) of the Basic
Provisions (Sec. 457.8), the contract change date is June 30 preceding
the cancellation date.
4. Cancellation and Termination Dates.
In accordance with section 2 of the Basic Provisions, the
cancellation and termination dates are:
------------------------------------------------------------------------
State Cancellation/termination date
------------------------------------------------------------------------
California, Nevada and Utah.............. October 31;
All other states......................... September 30.
------------------------------------------------------------------------
5. Report of Acreage.
In lieu of the provisions of section 6(a) of the Basic Provisions, a
report of all insured acreage of forage production must be submitted on
or before each forage production acreage reporting date specified in the
Special Provisions.
6. Insured Crop
(a) In accordance with section 8 of the Basic Provisions, the crop
insured will be all the forage in the county for which a premium rate is
provided by the actuarial documents:
(1) In which you have a share; and
(2) That is grown during one or more years after the year of
establishment.
(b) In addition to the crop listed as not insured in section 8
(Insured Crop) of the Basic Provisions (Sec. 457.8), we will not insure
any forage that:
(1) Does not have an adequate stand at the beginning of the
insurance period;
(2) Is grown with a non-forage crop; or
(3) Exceeds the age limitations for forage stands contained in the
Special Provisions.
[[Page 180]]
7. Insurance Period
In lieu of the provisions of section 11 (Insurance Period) of the
Basic Provisions (Sec. 457.8):
(a) Insurance attaches on acreage with an adequate stand on the
following dates:
(1) For the calendar year following the year of seeding for:
(i) Spring planted forage in Lassen, Modoc, Mono, Shasta and
Siskiyou Counties California, Colorado, Idaho, Nebraska, Nevada, Oregon,
Utah and Washington--April 15;
(ii) Spring planted forage in Iowa, Minnesota, Montana, New
Hampshire, New York, North Dakota, Pennsylvania, Wisconsin, Wyoming and
all other states--May 22;
(iii) Fall planted forage in Lassen, Modoc, Mono, Shasta and
Siskiyou Counties California, and all other states--October 16;
(iv) Fall planted forage in all California counties except Lassen,
Modoc, Mono, Shasta, and Siskiyou--December 1.
(2) For the calendar year of seeding for spring planted acreage in
all California counties except Lassen, Modoc, Mono, Shasta and
Siskiyou--December 1.
(3) For calendar years subsequent to the calendar year following the
year of seeding for:
(i) Lassen, Modoc, Mono, Shasta and Siskiyou California counties,
and all other states--October 16;
(ii) All California counties except Lassen, Modoc, Mono, Shasta and
Siskiyou--December 1.
(b) Insurance ends at the earliest of:
(1) Total destruction of the forage crop;
(2) Removal from the windrow or the field for each cutting;
(3) Final adjustment of a loss;
(4) The date grazing commences on the forage crop;
(5) Abandonment of the forage crop; or
(6) The following dates of the crop year:
(i) For Lassen, Modoc, Mono, Shasta, and Siskiyou Counties
California and all other states--October 15;
(ii) For all California counties except Lassen, Modoc, Mono, Shasta
and Siskiyou--November 30.
(c) In order to obtain year-round coverage for a calendar year, you
must purchase the Forage Production Winter Coverage Endorsement (Sec.
457.127).
8. Causes of Loss
(a) In accordance with the provisions of section 12 (Causes of Loss)
of the Basic Provisions (Sec. 457.8), insurance is provided only
against the following causes of loss that occur during the insurance
period:
(1) Adverse weather conditions;
(2) Fire;
(3) Insects, but not damage due to insufficient or improper
application of pest control measures;
(4) Plant disease, but not damage due to insufficient or improper
application of disease control measures;
(5) Wildlife;
(6) Earthquake;
(7) Volcanic eruption; or
(8) Failure of the irrigation water supply, if caused by an insured
peril that occurs during the insurance period.
(b) In addition to the causes of loss specifically excluded in
section 12 of the Basic Provisions, we will not insure against damage of
loss of production that occurs after removal from the windrow.
9. Duties in the Event of Damage or Loss
In addition to the requirements of section 14 of the Basic
Provisions, the following will apply:
(a) You must notify us within 3 days of the date harvest should have
started if the insured crop will not be harvested;
(b) You must notify us at least 15 days before any production from
any unit will be sold by direct marketing unless you have records
verifying that the forage was direct marketed. Failure to give timely
notice that production will be sold by direct marketing will result in
an appraised amount of production to count of not less than the
production guarantee per acre if such failure results in our inability
to make the required appraisal;
(c) If you intend to claim an indemnity on any unit, you must notify
us at least 15 days prior to the beginning of harvest if you previously
gave notice in accordance with section 14 of the Basic Provisions so
that we may inspect the damaged production. You must not destroy the
damaged crop until after we have given you written consent to do so. If
you fail to meet the requirements of this section, and such failure
results in our inability to inspect the damaged production, all such
production will be considered undamaged and will be included as
production to count; and
(d) You must notify us at least 5 days before grazing of insured
forage begins so we can conduct an appraisal to determine production to
count. Failure to give timely notice that the acreage will be grazed
will result in an appraised amount of production to count of not less
than the production guarantee per acre.
10. Settlement of Claim
(a) We will determine your loss on a unit basis. In the event you
are unable to provide separate acceptable production records:
(1) For any optional units, we will combine all optional units for
which such production records were not provided; or
(2) For any basic units, we will allocate any commingled production
to such units in proportion to our liability on the harvested acreage
for the units.
[[Page 181]]
(b) In the event of loss or damage covered by this policy, we will
settle your claim by:
(1) Multiplying the insured acreage for each type, by its respective
production guarantee;
(2) Multiplying each result in section 11(b)(1) by the respective
price election you selected;
(3) Totaling the results of each crop type in section 11(b)(2);
(4) Multiplying the total production to be counted of each type, if
applicable, (see section 11(c)) by the respective price election you
selected;
(5) Totaling the results of each crop type in section 11(b)(4);
(6) Subtracting the result in section 11(b)(5) from the result in
section 11(b)(3); and
(7) Multiplying the result in section 11(b)(6) by your share.
Example 1
Assume you have a 100 percent share in 100 acres of type A forage in
the unit, with a guarantee of 3.0 tons per acre and a price election of
$65.00 per ton. Due to adverse weather you were only able to harvest
50.0 tons. Your indemnity would be calculated as follows:
1. 100 acres type A x 3 tons = 300 ton guarantee;
2 & 3. 300 tons x $65 price election = $19,500 total value
guarantee;
4 & 5. 50 tons production to count x $65 price election = $3,250
total value of production to count;
6. $19,500 value guarantee--$3,250 = $16,250 loss; and
7. $16,250 x 100 percent share = $16,250 indemnity payment.
Example 2
Assume you also have a 100 percent share in 100 acres of type B
forage in the same unit, with a guarantee of 1.0 ton per acre and a
price election of $50.00 per ton. Due to adverse weather you were only
able to harvest 5.0 tons. Your total indemnity for forage production for
both types A and B in the same unit would be calculated as follows:
1. 100 acres x 3 tons = 300 ton guarantee for type A; and 100 acres
x 1 ton = 100 ton guarantee for type B;
2. 300 ton guarantee x $65 price election = $19,500 total value of
the guarantee for type A; and 100 ton guarantee x $50 price election =
$5,000 total value of the guarantee for type B;
3. $19,500 + $5,000 = $24,500 total value of the guarantee;
4. 50 tons x $65 price election = $3,250 total value of production
to count for type A; and 5 tons x $50 price election = $250 total value
of production to count for type B;
5. $3,250 + $250 = $ 3,500 total value of production to count for
types A and B;
6. $24,500--$3,500 = $21,000 loss; and
7. $21,000 loss x 100 percent share = $21,000 indemnity payment.
(c) The total production to count (in tons) from all insurable
acreage on the unit will include:
(1) All appraised production as follows:
(i) Not less than the production guarantee per acre for acreage:
(A) That is abandoned;
(B) Put to another use without our consent;
(C) Damaged solely by uninsured causes; or
(D) For which you fail to provide production records that are
acceptable to us;
(ii) Production lost due to uninsured causes;
(iii) Unharvested production;
(iv) Potential production on insured acreage that you intend to put
to another use or abandon, if you and we agree on the appraised amount
of production. Upon such agreement, the insurance period for that
acreage will end when you put the acreage to another use or abandon the
crop. If agreement on the appraised amount of production is not reached
and:
(A) You do not elect to continue to care for the crop, we may give
you consent to put the acreage to another use if you agree to leave
intact, and provide sufficient care for, representative samples of the
crop in locations acceptable to us (The amount of production to count
for such acreage will be based on the harvested production or appraisals
from the samples at the time harvest should have occurred. If you do not
leave the required samples intact, or fail to provide sufficient care
for the samples, our appraisal made prior to giving you consent to put
the acreage to another use will be used to determine the amount of
production to count); or
(B) You elect to continue to care for the crop, the amount of
production to count for the acreage will be the harvested production, or
our reappraisal if additional damage occurs and the crop is not
harvested; and
(2) All harvested production from the insurable acreage.
(d) When forage is harvested as other than air-dry forage, the
production to count will be adjusted to the equivalent of air-dry
forage.
(e) Any harvested production from plants growing in the forage will
be counted as forage on a weight basis.
(f) In addition to the provisions of section 15 (Production Included
in Determining Indemnities) of the Basic Provisions (Sec. 457.8), we
may determine the amount of production of any unharvested forage on the
basis of our field appraisals conducted after the normal time for each
cutting for the area.
[[Page 182]]
11. Late and Prevented Planting
The late and prevented planting provisions of the Basic Provisions
are not applicable.
[62 FR 14285, Mar. 26, 1997, as amended at 62 FR 65169, Dec. 10, 1997;
65 FR 3783, Jan. 25, 2000; 65 FR 11457, Mar. 3, 2000]
Sec. 457.118 Malting barley crop insurance.
The malting barley crop insurance provisions for the 1996 and
succeeding crop years are as follows:
United States Department of Agriculture
Federal Crop Insurance Corporation
Small Grains Crop Insurance Malting Barley Price and Quality Endorsement
(This is a continuous endorsement. Refer to section 2 of the Common Crop
Insurance Policy.)
In return for your payment of premium for the coverage contained
herein, this endorsement will be attached to and made part of the Common
Crop Insurance Policy (Sec. 457.8) and Small Grains Crop Provisions
(Sec. 457.101), subject to the terms and conditions described herein.
1. You must have the Common Crop Insurance Policy (Sec. 457.8) and
the Small Grains Crop Insurance Provisions (Sec. 457.101) in force to
elect to insure malting barley under this endorsement.
2. You must select either Option A or Option B on or before the
sales closing date. Failure to select either Option A or Option B, or if
you elect Option B but fail to have a malting barley contract in effect
by the acreage reporting date, will result in no coverage under this
endorsement for the applicable crop year. If you elect coverage under
Option A, and subsequently enter into a malting barley contract, your
coverage will continue under the terms of Option A. Your selection
(Option A or B) will continue from year to year unless you cancel or
change your selection on or before the sales closing date.
3. You must select either an additional value price election or a
percentage of the maximum additional value price election on or before
the sales closing date. The percentage of the maximum additional value
price election you select does not have to be the same as that selected
under the Small Grains Crop Provisions for feed barley. In the event
that you choose a percentage of the maximum additional value price
election, we will multiply that percentage by the maximum additional
value price election specified in Option A or B to determine the
additional value price election that pertains to your contract.
4. The additional premium amount for this coverage will be
determined by multiplying your malting barley production guarantee per
acre by your selected additional value price election, times the premium
rate stated in the Actuarial Table, times the acreage planted to
approved malting barley varieties, times your share at the time coverage
begins.
5. In addition to the reporting requirements contained in section 6
of the Common Crop Insurance Policy (Sec. 457.8), you must provide the
information required by the Option you select.
6. In lieu of the provisions regarding units and unit division in
the Common Crop Insurance Policy (Sec. 457.8) and the Small Grains Crop
Provisions (Sec. 457.101), all barley acreage in the county that is
planted to malting varieties that is insurable under the Small Grains
Crop Provisions for feed barley and your selected Option must be insured
under this endorsement and will be considered as one unit regardless of
whether such acreage is owned, rented for cash, or rented for a share of
the crop. The producer's shares in the malting barley acreage to be
insured under this endorsement must be designated on the acreage report.
7. In lieu of the provisions in the Common Crop Insurance Policy
(Sec. 457.8) that requires us to pay your loss within 30 days after we
reach agreement with you, whenever any production fails one or more of
the quality criteria specified herein, the claim may not be settled
until the earlier of:
(a) The date you sell, feed, donate, or otherwise utilize such
production for any purpose; or
(b) May 31 of the calendar year immediately following the calendar
year in which the insured malting barley is normally harvested.
If the production meets all quality criteria contained herein or
grades U.S. No. 4 or lower in accordance with the grades and grade
requirements for the subclasses Six-rowed and Two-rowed barley, and for
the class Barley in accordance with the Official United States Standards
for Grain, the claim will be settled within 30 days in accordance with
the Common Crop Insurance Policy (Sec. 457.8).
8. This endorsement does not provide additional prevented planting
coverage. Such coverage is only provided in accordance with the
provisions of the Small Grain Crop Provisions for feed barley.
9. Production from all acreage insured under this endorsement and
any production of feed barley varieties must not be commingled prior to
our making all determinations necessary for the purposes of this
insurance. Failure to keep production separate may result in denial of
your claim for indemnity.
10. Definitions:
[[Page 183]]
(a) APH. Actual production history as determined in accordance with
7 CFR part 400, subpart G.
(b) Approved malting variety. A variety of barley specified as such
in the Special Provisions.
(c) Brewery. A facility where malt beverages are commercially
produced for human consumption.
(d) Contracted production. A quantity of barley the producer agrees
to grow and deliver, and the buyer agrees to accept, under the terms of
the malting barley contract.
(e) Licensed grain grader. A person authorized by the U.S.
Department of Agriculture to inspect and grade barley under the U.S.
Standards for malt barley.
(f) Malting barley contract. An agreement in writing between the
producer and a brewery or a business enterprise that produces or sells
malt or processed mash to a brewery, or a business enterprise owned by
such brewery or business, that contains the amount of contracted
production, the purchase price, or a method to determine such price, and
other such terms that establish the obligations of each party to the
agreement.
(g) Objective test. A determination made by a qualified person using
standardized equipment that is widely used in the malting industry, and
following a procedure approved by the American Society of Brewing
Chemists when determining percent germination or protein content;
grading performed by following a procedure approved by the Federal Grain
Inspection Service when determining quality factors other than percent
germination or protein content; or by the Food and Drug Administration
when determining concentrations of mycotoxins or other substances or
conditions that are identified as being injurious to human or animal
health.
(h) Subjective test. A determination made by a person using
olfactory, visual, touch or feel, masticatory, or other senses unless
performed by a licensed grain grader; or that uses non-standardized
equipment; or that does not follow a procedure approved by the American
Society of Brewing Chemists, the Federal Grain Inspection Service, or
the Food and Drug Administration.
(i) Unit. All insurable acreage of approved malting varieties in the
county on the date coverage begins for the crop year.
Option A--(Available for Producers of Production Contracted After the
Sales Closing Date, Non-Contracted Production, or a Combination of
Contracted and Non-Contracted Production)
This option provides coverage for malting barley production and
quality losses at a price per bushel greater than that offered under the
Small Grains Crop Provisions.
1. To be eligible for coverage under this option, you must provide
us acceptable records of your sales of malting barley and the number of
acres planted to malting varieties for at least the four crop years in
your APH database prior to the crop year immediately preceding the
current crop year. For example, to determine your production guarantee
for the 1996 crop year, records must be provided for the 1991 through
the 1994 crop years, if malting barley varieties were planted in each of
those crop years. Failure to provide acceptable records or reports as
required herein will make you ineligible for coverage under this
endorsement. You must provide these records to us no later than the
production reporting date specified in the Common Crop Insurance Policy
(Sec. 457.8).
2. Your malting barley production guarantee per acre will be the
lesser of:
(a) The production guarantee for feed barley for acreage planted to
approved malting varieties calculated in accordance with the Small
Grains Crop Provisions and APH regulations; or
(b) A production guarantee calculated in accordance with APH
procedures using the malting barley sales and acreage records provided
by you.
3. The additional value price per bushel elected cannot exceed the
maximum price designated in the Special Provisions.
4. The amount of production to count against your malting barley
production guarantee will be determined as follows:
(a) Production to count will include all:
(1) Appraised production determined in accordance with sections
11(c)(1) (i) and (ii) of the Small Grains Crop Provisions;
(2) Harvested production and potential unharvested production that
meets, or would meet if properly handled;
(i) Tolerances established by the Food and Drug Administration or
other public health organization of the United States for substances or
conditions, including mycotoxins, that are identified as being injurious
to human health; and
(ii) The following quality standards, as applicable:
------------------------------------------------------------------------
Six-rowed malting Two-rowed malting
barley (percent) barley (percent)
------------------------------------------------------------------------
Protein (dry basis)............. 14.0 maximum...... 14.0 maximum
Plump kernels................... 65.0 minimum...... 75.0 minimum
Thin kernels.................... 10.0 maximum...... 10.0 maximum
Germination..................... 95.0 minimum...... 95.0 minimum
Blight damaged.................. 4.0 maximum....... 4.0 maximum
Injured by mold................. 5.0 maximum....... 5.0 maximum
Mold damaged.................... 0.4 maximum....... 0.4 maximum
Sprout damaged.................. 1.0 maximum....... 1.0 maximum
Injured by frost................ 5.0 maximum....... 5.0 maximum
Frost damaged................... 0.4 maximum....... 0.4 maximum
------------------------------------------------------------------------
(3) Harvested production that does not meet the quality standards
contained in section 4(a)(2) of this Option, but is accepted by a buyer
for malting purposes. For such production, the production to count may
be reduced or the price used to settle the claim
[[Page 184]]
may be adjusted in accordance with sections 4 (b), (c), and (d) of this
Option.
(b) The quantity of production that initially fails any quality
standard contained in section 4(a)(2), but is sold as malting barley
(except production included in section 4(c)), may be reduced as
described in this subsection, provided the failure of such production to
meet these standards is due to insurable causes. The production to count
of production sold under section 4(a)(3) will be determined by:
(1) Adding the maximum barley price election under the Small Grains
Crop Provisions and the maximum additional value price;
(2) Dividing the price per bushel received for the damaged
production by the result of paragraph (1); and
(3) Multiplying the result of paragraph (2) (not to exceed 1.000) by
the number of bushels of damaged production.
(c) The production to count for production that initially fails any
quality standard contained in section 4 (a)(2), sold as malting barley,
but is conditioned before the sale will not be reduced under section
4(b). Such production will be considered separately from all other
production to count. (See section 5(d).)
(d) The additional value price election per bushel used to determine
the value of the production to count for production that initially fails
any quality standard contained in section 4(a)(2), but is sold as
malting barley, may be reduced by the cost incurred for any conditioning
required to improve the quality of production so that it is marketable
as malting barley, provided the failure of such production to meet these
standards is due to insurable causes.
(e) No reduction in the production to count or the additional value
price election will be allowed for moisture content, damage due to
uninsured causes; costs or reduced value associated with drying,
handling, processing, or quality factors other than those contained in
section 4(a)(2) of this Option; or any other costs associated with
normal handling and marketing of malting barely.
(f) All grade and quality determinations must be based on the
results of objective tests. No indemnity will be paid for any loss
established by subjective tests. We may obtain one or more samples of
the insured crop and have tests performed at an official grain
inspection location established under the U.S. Grain Standards Act or
laboratory of our choice to verify the results of any test. In the event
of a conflict in the test results, our results will determine the amount
of production to count.
5. In the event of loss or damage covered by this policy, we will
settle your claim by:
(a) Multiplying the insured acreage times your malting barley
production guarantee per acre;
(b) Multiplying the result in subsection (a) of this section times
your additional value price election per bushel;
(c) Multiplying the number of bushels of production to count
determined in accordance with sections 4(a) and (b) of this Option times
your elected additional value price per bushel;
(d) Multiplying the production to count determined under section
4(c) of this Option times the additional value price per bushel
determined in section 4(d) of the Option;
(e) Adding the results of subsections (c) and (d) of this section;
(f) Subtracting the result of subsection (e) of this section from
the result in subsection (b); and
(g) Multiplying the result of subsection (f) of this section times
your share.
6. For example, assume you insure two units of barley under the
Small Grains Crop Provisions in which you have a 100% share and that are
planted to approved malting varieties. Assume the following:
(a) Each unit contains 40 acres;
(b) You have sold an average of 20 bushels per acre of malting
barley for each of the last 6 years;
(c) You have selected the 70 percent coverage level;
(d) Your production guarantee under the Small Grains Crop Provisions
and the APH regulations for feed barley is 30 bushels per acre;
(e) Your total production from all units under the Small Grains Crop
Provisions is 1,000 bushels, all of which fails to meet the quality
standards specified by this Option. Two hundred bushels are sold for
malting purposes after conditioning. Conditioning costs are $0.05 per
bushel; and
(f) Your additional value price election is $0.40 per bushel.
Your malting barley production guarantee is 1120.0 bushels (the
lesser of 20 or 30x70 percent coverage level x80 acres). The value of
your production guarantee is $448.00 (1120 bushels x$0.40 per bushel).
Your production to count is 200 bushels. The value of your production to
count is $70.00 (200 bushels x$0.35 ($0.40--$0.05)). Your indemnity for
the malting barley unit is $378.00 (($448.00--$70.00) x100 percent
share). Any remaining loss is paid under the Small Grains Crop
Provisions for feed barley.
Option B--(Available for Producers of Contracted Production Only)
This option provides coverage for malting barley production and
quality losses at a price per bushel greater than that offered under the
Small Grains Crop Provisions provided you have a malting barley
contract.
1. If you elect this option you must provide us a copy of your
malting barley contract on or before the acreage reporting date. All
[[Page 185]]
terms and conditions of the contract, including the contract price or
futures contract premium price, must be specified in the contract and be
effective on or before the acreage reporting date. If you fail to timely
provide the contract, or any terms are omitted, we may elect to
determine the relevant information necessary for insurance under this
Option (B), or deny liability. Only contracted production or acreage is
covered by this Option (B).
2. Your malting barley guarantee per acre will be the lesser of:
(a) The production guarantee for feed barley for acreage planted to
approved malting barley varieties calculated in accordance with the
Small Grains Crop Provisions and APH regulations; or
(b) The number of bushels obtained by:
(1) Dividing the number of bushels of contracted production by the
number of acres planted to approved malting varieties in the current
crop year; and
(2) Multiplying the result by the percentage for the coverage level
you elected under the Small Grains Crop Provisions.
3. The additional value price election per bushel will be the lesser
of, as applicable:
(a) The guaranteed sale price per bushel established in the malting
barley contract (without regard to discounts or incentives that may
apply) minus the maximum price election for feed barley; or
(b) The premium price per bushel (without regard to discounts or
incentives) if the sale price is based on a future market price as
specified in the malting barley contract.
Under no circumstances will the additional value price election per
bushel exceed $2.00 per bushel.
4. The amount of production to count against your malting barley
production guarantee will be determined as follows:
(a) Production to count will include all:
(1) Appraised production determined in accordance with sections
11(c)(1) (i) and (ii) of the Small Grains Crop Provisions;
(2) Harvested production and potential unharvested production that
meets, or would meet if properly handled, the minimum acceptance
standards contained in the malting barley contract for protein, plump
kernels, thin kernels, germination, blight damage, mold injury or
damage, sprout damage, frost injury or damage, and mycotoxins or other
substances or conditions identified by the Food and Drug Administration
or other public health organization of the United States as being
injurious to human health, or the following quality standards as
applicable:
------------------------------------------------------------------------
Six-rowed malting Two-rowed malting
barley barley
---------------------------------------
(percent) (percent)
------------------------------------------------------------------------
Protein (dry basis)............. 14.0 maximum...... 14.0 maximum
Plump kernels................... 65.0 minimum...... 75.0 minimum
Thin kernels.................... 10.0 maximum...... 10.0 maximum
Germination..................... 95.0 minimum...... 95.0 minimum
Blight damaged.................. 4.0 maximum....... 4.0 maximum
Injured by mold................. 5.0 maximum....... 5.0 maximum
Mold damaged.................... 0.4 maximum....... 0.4 maximum
Sprout damaged.................. 1.0 maximum....... 1.0 maximum
Injured by frost................ 5.0 maximum....... 5.0 maximum
Frost damaged................... 0.4 maximum....... 0.4 maximum
------------------------------------------------------------------------
(3) Harvested production that does not meet the quality standards
contained in section 4(a)(2) of this Option, but is accepted by a buyer
for malting purposes. For such production, the production to count may
be reduced or the price used to settle the claim may be adjusted in
accordance with sections 4 (b), (c), and (d) of this Option.
(b) The quantity of production that initially fails any quality
standard contained in section 4(a)(2), but is sold as malting barley
(except production included in section 4(c)), may be reduced as
described in this subsection, provided the failure of such production to
meet these standards is due to insurable causes. The production to count
of production sold under section 4(a)(3) will be determined by:
(1) Adding the maximum barley price election under the Small Grains
Crop Provisions and the maximum additional value price;
(2) Dividing the price per bushel received for the damaged
production by the result of paragraph (1); and
(3i) Multiplying the result of paragraph (2) (not to exceed 1.000)
by the number of bushels of damaged production.
(c) The production to count for production that initially fails any
quality standard contained in section 4(a)(2), sold as malting barley,
but is conditioned before the sale will not be reduced under section
4(b). Such production will be considered separately from all other
production to count. (See section 5(d).)
(d) The additional value price election per bushel used to determine
the value of the production to count for production that initially fails
any quality standard contained in section 4(a)(2), but is sold as
malting barley, may be reduced by the cost incurred for any conditioning
required to improve the quality of production so that it is marketable
as malting barley, provided the failure of such production to meet these
standards is due to insurable causes.
(e) No reduction in the production to count or the additional value
price election will be allowed for moisture content, damage due to
uninsured causes; costs or reduced value associated with drying,
handling, processing, or quality factors other than those contained in
section 4(a)(2) of this Option; or any other costs associated with
normal handling and marketing of malting barely.
[[Page 186]]
(f) All grade and quality determinations must be based on the
results of objective tests. No indemnity will be paid for any loss
established by subjective tests. We may obtain one or more samples of
the insured crop and have tests performed at an official grain
inspection location established under the U.S. Grain Standards Act or
laboratory of our choice to verify the results of any test. In the event
of a conflict in the test results, our results will determine the amount
of production to count.
5. In the event of loss or damage covered by this policy, we will
settle your claim by:
(a) Multiplying the insured acreage times your malting barley
production guarantee per acre;
(b) Multiplying the result in subsection (a) of this section times
your additional value price election per bushel;
(c) Multiplying the number of bushels of production to count
determined in accordance with sections 4 (a) and (b) of this Option
times your elected additional value price per bushel;
(d) Multiplying the production to count determined under section
4(c) of this Option times the additional value price per bushel
determined in section 4(d) of the Option;
(e) Adding the results of subsections (c) and (d) of this section;
(f) Subtracting the result of subsection (e) of this section from
the result in subsection (b); and
(g) Multiplying the result of subsection (f) of this section times
your share.
6. For example, assume you insure two units of barley under the
Small Grains Crop Provisions in which you have a 100% share and that are
planted to approved malting varieties. Assume the following:
(a) Each unit contains 40 acres;
(b) You have a contract for the sale of 2500 bushels of malting
barley;
(c) You have selected the 70 percent coverage level;
(d) Your production guarantee under the Small Grains Crop Provisions
and the APH regulations for feed barley is 35 bushels per acre;
(e) Your total production from all units under the Small Grains Crop
Provisions is 1,000 bushels, all of which fails to meet the quality
standards specified by this Option. Two hundred bushels are sold for
malting purposes after conditioning. Conditioning cost $0.05 per bushel;
and
(f) Your additional value price election is $0.60 per bushel.
Your malting barley production guarantee is 1750.0 bushels (the
lesser of 35 or 21.875 (2500 contracted bushels /80 acresx70 percent
coverage)x80 acres). The value of your production guarantee is $1050.00
(1750 bushelsx$0.60 per bushel). Your production to count is 200
bushels. The value of your production to count is $110.00 (200
bushelsx$0.55 ($0.60--$0.05)). Your indemnity for the malting barley
unit is $940.00 (($1050.00-$110.00)x100 percent share). Any remaining
loss is paid under the Small Grains Crop Provisions for feed barley.
[61 FR 8855, Mar. 6, 1996; 61 FR 27245, May 31, 1996]
Sec. 457.119 Texas citrus fruit crop insurance provisions.
The Texas citrus fruit crop insurance provisions for the 2000 and
succeeding crop years are as follows:
United States Department of Agriculture
Federal Crop Insurance Corporation
Texas Citrus Fruit Crop Provisions
If a conflict exists among the policy provisions, the order of
priority is as follows: (1) The Catastrophic Risk Protection
Endorsement, if applicable; (2) the Special Provisions; (3) these Crop
Provisions; and (4) the Basic Provisions with (1) controlling (2), etc.
1. Definitions
Crop. Specific groups of citrus fruit as listed in the Special
Provisions.
Crop year. The period beginning with the date insurance attaches to
the citrus crop and extending through the normal harvest time. It is
designated by the calendar year following the year in which the bloom is
normally set.
Direct marketing. Sale of the insured crop directly to consumers
without the intervention of an intermediary such as a wholesaler,
retailer, packer, processor, shipper, or buyer. Examples of direct
marketing include selling through an on-farm or roadside stand, farmer's
market, and permitting the general public to enter the field for the
purpose of picking all or a portion of the crop.
Excess rain. An amount of precipitation that damages the crop.
Excess wind. A natural movement of air that has sustained speeds
exceeding 58 miles per hour recorded at the U. S. Weather Service
reporting station operating nearest to the grove at the time of damage.
Freeze. The formation of ice in the cells of the tree, its blossoms,
or its fruit caused by low air temperatures.
Harvest. The severance of mature citrus fruit from the tree by
pulling, picking, or any other means, or by collecting marketable fruit
from the ground.
Hedged. A process of trimming the sides of the citrus trees for
better or more fruitful growth of the citrus fruit.
Interplanted. Acreage on which two or more crops are planted in any
form of alternating or mixed pattern.
Local market price. The applicable citrus price per ton offered by
buyers in the area in
[[Page 187]]
which you normally market the insured crop.
Production guarantee (per acre):
(a) First stage production guarantee. The second stage production
guarantee multiplied by forty percent (40%).
(b) Second stage production guarantee. The quantity of citrus (in
tons) determined by multiplying the yield determined in accordance with
section 3 by the coverage level percentage you elect.
Ton. Two thousand (2,000) pounds avoirdupois.
Topped. A process of trimming the uppermost portion of the citrus
trees for better and more fruitful growth of the citrus fruit.
Varieties. Subclasses of crops as listed in the Special Provisions.
2. Unit Division
(a) A basic unit, as defined in section 1 of the Basic Provisions,
will be divided into additional basic units by each citrus crop
designated in the Special Provisions.
(b) Provisions in the Basic Provisions that allow optional units by
irrigated and non-irrigated practices are not applicable.
(c) Instead of establishing optional units by section, section
equivalent, or FSA farm serial number, optional unit is located on non-
contiguous land.
3. Insurance Guarantees, Coverage Levels, and Prices for Determining
Indemnities
In addition to the requirements of section 3 (Insurance Guarantees,
Coverage Levels, and Prices for Determining Indemnities) of the Basic
Provisions (Sec. 457.8):
(a) You may select only one price election and coverage level for
each citrus fruit crop designated in the Special Provisions that you
elect to insure. The price election you choose for each crop need not
bear the same percentage relationship to the maximum price offered by us
for each crop. For example, if you choose one hundred percent (100%) of
the maximum price election for early oranges, you may choose seventy-
five percent (75%) of the maximum price election for late oranges.
However, if separate price elections are available by variety within
each crop, the price elections you choose within the crop must have the
same percentage relationship to the maximum price offered by us for each
variety within the crop.
(b) The production guarantee per acre is progressive by stage and
increases at specific intervals to the final stage production guarantee.
The stages and production guarantees per acre are:
(1) The first stage extends from the date insurance attaches through
April 30 of the calendar year of normal bloom. The production guarantee
will be forty percent (40%) of the yield calculated in section 3(e)
multiplied by your coverage level.
(2) The second or final stage extends from May 1 of the calendar
year of normal bloom until the end of the insurance period. The
production guarantee will be the yield calculated in section 3(e)
multiplied by your coverage level.
(c) Any acreage of citrus damaged in the first stage to the extent
that the majority of producers in the area would not further maintain it
will be limited to the first stage production guarantee even though you
may continue to maintain it.
(d) In addition to the reported production, each crop year you must
report by type:
(1) The number of trees damaged, topped, hedged, pruned or removed;
any change in practices or any other circumstance that may reduce the
expected yield below the yield upon which the insurance guarantee is
based; and the number of affected acres;
(2) The number of bearing trees on insurable and uninsurable
acreage;
(3) The age of the trees and the planting pattern; and
(4) For the first year of insurance for acreage interplanted with
another perennial crop, and anytime the planting pattern of such acreage
is changed:
(i) The age of the interplanted crop, and type if applicable;
(ii) The planting pattern; and
(iii) Any other information that we request in order to establish
your approved yield.
We will reduce the yield used to establish your production guarantee
as necessary, based on our estimate of the effect of the following:
interplanted perennial crop; removal, topping, hedging, or pruning of
trees; damage; change in practices and any other circumstance on the
yield potential of the insured crop. If you fail to notify us of any
circumstance that may reduce your yields from previous levels, we will
reduce your production guarantee as necessary at any time we become
aware of the circumstance.
(e) The yield used to compute your production guarantee will be
determined in accordance with Actual Production History (APH)
regulations, 7 CFR part 400, subpart G, and applicable policy provisions
unless damage or changes to the grove or trees, require establishment of
the yield by another method. In the event of such damage or changes, the
yield will be based on our appraisal of the potential of the insured
acreage for the crop year.
(f) Instead of reporting your citrus production for the previous
crop year, as required by section 3 of the Basic Provisions (Sec.
457.8), there is a one year lag period. Each crop year you must report
your production from two crop years ago, e.g., on the 1998 crop year
production report, you will provide your 1996 crop year production.
[[Page 188]]
4. Contract Changes
In accordance with section 4 (Contract Changes) of the Basic
Provisions (Sec. 457.8), the contract change date is August 31
preceding the cancellation date.
5. Cancellation and Termination Dates
In accordance with section 2 (Life of Policy, Cancellation, and
Termination) of the Basic Provisions (Sec. 457.8), the cancellation and
termination dates are November 20.
6. Annual Premium
In lieu of the premium computation method in section 7 (Annual
Premium) of the Basic Provisions (Sec. 457.8), the annual premium
amount is computed by multiplying the second stage production guarantee
per acre by the price election, the premium rate, the insured acreage,
your share at the time coverage begins, and by any applicable premium
adjustment percentages contained in the Special Provisions.
7. Insured Crop
In accordance with section 8 (Insured Crop) of the Basic Provisions
(Sec. 457.8), the crop insured will be all the acreage in the county of
each citrus crop designated in the Special Provisions that you elect to
insure and for which a premium rate is provided by the actuarial
documents:
(a) In which you have a share;
(b) That are adapted to the area;
(c) That are irrigated;
(d) That has produced an average yield of at least three tons per
acre the previous year, or we have appraised the yield potential of at
least three tons per acre;
(e) That is grown in a grove that, if inspected, is considered
acceptable by us; and
(f) That is not sold by direct marketing, unless allowed by the
Special Provisions or by written agreement.
8. Insurable Acreage
In lieu of the provisions in section 9 (Insurable Acreage) of the
Basic Provisions (Sec. 457.8), that prohibit insurance attaching to a
crop planted with another crop, citrus interplanted with another
perennial crop is insurable unless we inspect the acreage and determine
it does not meet the requirements contained in your policy.
9. Insurance Period
(a) In accordance with the provisions of section 11 (Insurance
Period) of the Basic Provisions (Sec. 457.8):
(1) Coverage begins on November 21 of each crop year, except that
for the year of application, if your application is received after
November 11 but prior to November 21, insurance will attach on the 10th
day after your properly completed application is received in our local
office, unless we inspect the acreage during the 10 day period and
determine that it does not meet insurability requirements. You must
provide any information that we require for the crop or to determine the
condition of the grove.
(2) The calendar date for the end of the insurance period for each
crop year is the second May 31st of the crop year.
(b) In addition to the provisions of section 11 (Insurance Period)
of the Basic Provisions (Sec. 457.8):
(1) If you acquire an insurable share in any insurable acreage after
coverage begins, but on or before the acreage reporting date for the
crop year, and after an inspection we consider the acreage acceptable,
insurance will be considered to have attached to such acreage on the
calendar date for the beginning of the insurance period.
(2) If you relinquish your insurable share on any insurable acreage
of citrus on or before the acreage reporting date for the crop year,
insurance will not be considered to have attached to, and no premium
will be due, and no indemnity paid for such acreage for that crop year
unless:
(i) A transfer of coverage and right to an indemnity, or a similar
form approved by us, is completed by all affected parties;
(ii) We are notified by you or the transferee in writing of such
transfer on or before the acreage reporting date; and
(iii) The transferee is eligible for crop insurance.
10. Causes of Loss
(a) In accordance with the provisions of section 12 (Causes of Loss)
of the Basic Provisions (Sec. 457.8), insurance is provided only
against the following causes of loss that occur within the insurance
period:
(1) Excess rain;
(2) Excess wind;
(3) Fire, unless weeds and other forms of undergrowth have not been
controlled or pruning debris has not been removed from the grove;
(4) Freeze;
(5) Hail;
(6) Tornado;
(7) Wildlife; or
(8) Failure of the irrigation water supply if caused by an insured
peril or drought that occurs during the insurance period.
(b) In addition to the causes of loss excluded in section 12 (Causes
of Loss) of the Basic Provisions (Sec. 457.8), we will not insure
against damage or loss of production due to:
(1) Disease or insect infestation, unless a cause of loss specified
in section 10(a):
(i) Prevents the proper application of control measures or causes
properly applied control measures to be ineffective; or
(ii) Causes disease or insect infestation for which no effective
control mechanism is available;
[[Page 189]]
(2) Inability to market the citrus for any reason other than actual
physical damage from an insurable cause specified in this section. For
example, we will not pay you an indemnity if you are unable to market
due to quarantine, boycott, or refusal of any person to accept
production.
11. Duties in the Event of Damage or Loss
In addition to the requirements of section 14 (Duties in the Event
of Damage or Loss) of the Basic Provisions (Sec. 457.8), the following
will apply:
(a) If the Special Provisions permit or a written agreement
authorizing direct marketing exists, you must notify us at least 15 days
before any production from any unit will be sold by direct marketing. We
will conduct an appraisal that will be used to determine your production
to count for production that is sold by direct marketing. If damage
occurs after this appraisal, we will conduct an additional appraisal.
These appraisals, and any acceptable records provided by you, will be
used to determine your production to count. Failure to give timely
notice that production will be sold by direct marketing will result in
an appraised amount of production to count of not less than the
production guarantee per acre if such failure results in our inability
to make the required appraisal.
(b) If you intend to claim an indemnity on any unit, you must notify
us before beginning to harvest any damaged production so we may have an
opportunity to inspect it. You must not sell or dispose of the damaged
crop until after we have given you written consent to do so. If you fail
to meet the requirements of this section all such production will be
considered undamaged and included as production to count.
12. Settlement of Claim
(a) We will determine your loss on a unit basis. In the event you
are unable to provide acceptable production records:
(1) For any optional unit, we will combine all optional units for
which such production records were not provided; or
(2) For any basic unit, we will allocate any commingled production
to such units in proportion to our liability on the harvested acreage
for each unit.
(b) In the event of loss or damage covered by this policy, we will
settle your claim on a unit basis by:
(1) Multiplying the insured acreage for each crop, or variety if
applicable, by its respective production guarantee (see sections 1 and
3);
(2) Multiplying the results of section 12(b)(1) by the respective
price election for each crop or variety, if applicable;
(3) Totaling the results of section 12(b)(2);
(4) Multiplying the total production to count of each variety, if
applicable (see section 12(c)) by the respective price election;
(5) Totaling the results of section 12(b)(4);
(6) Subtracting this result of section 12(b)(5) from the result of
section 12(b)(3); and
(7) Multiplying the result of section 12(b)(6) by your share.
(c) The total production to count (in tons) from all insurable
acreage on the unit will include:
(1) All appraised production as follows:
(i) Not less than the production guarantee per acre for acreage:
(A) That is abandoned;
(B) For which you fail to provide acceptable production records;
(C) That is damaged solely by uninsured causes; or
(D) From which production is sold by direct marketing, if direct
marketing is specifically permitted by the Special Provisions or a
written agreement, and you fail to meet the requirements contained in
section 11;
(ii) Production lost due to uninsured causes;
(iii) Unharvested production; and
(iv) Potential production on insured acreage you intend to abandon
or no longer care for, if you and we agree on the appraised amount of
production. Upon such agreement, the insurance period for that acreage
will end. If you do not agree with our appraisal, we may defer the claim
only if you agree to continue to care for the crop. We will then make
another appraisal when you notify us of further damage or that harvest
is general in the area unless you harvested the crop, in which case we
will use the harvested production. If you do not continue to care for
the crop, our appraisal made prior to deferring the claim will be used
to determine the production to count; and
(2) All harvested production from the insurable acreage.
(d) Any citrus fruit that is not marketed as fresh fruit and, due to
insurable causes, does not contain 120 or more gallons of juice per ton,
will be adjusted by:
(1) Dividing the gallons of juice per ton obtained from the damaged
citrus by 120; and
(2) Multiplying the result by the number of tons of such citrus.
If individual records of juice content are not available, an average
juice content from the nearest juice plant will be used, if available.
If not available, a field appraisal will be made to determine the
average juice content.
(e) Where the actuarial documents provide, and you elect, the fresh
fruit option, citrus fruit that is not marketable as fresh fruit due to
insurable causes will be adjusted by:
(1) Dividing the value per ton of the damaged citrus by the price of
undamaged citrus fruit; and
[[Page 190]]
(2) Multiplying the result by the number of tons of such citrus
fruit. The applicable price for undamaged citrus fruit will be the local
market price the week before damage occurred.
(f) Any production will be considered marketed or marketable as
fresh fruit unless, due solely to insured causes, such production was
not marketed as fresh fruit.
(g) In the absence of acceptable records of disposition of harvested
citrus fruit, the disposition and amount of production to count for the
unit will be the guarantee on the unit.
(h) Any citrus fruit on the ground that is not harvested will be
considered totally lost if damaged by an insured cause.
13. Late and Prevented Planting
The late and prevented planting provisions of the Basic Provisions
are not applicable.
[61 FR 41300, Aug. 8, 1996; 61 FR 57583, Nov. 7, 1996, as amended at 62
FR 65169, Dec. 10, 1997]
Sec. 457.120 [Reserved]
Sec. 457.121 Arizona-California citrus crop insurance provisions.
The Arizona-California citrus crop insurance provisions for the 2000
and succeeding crop years are as follows:
United States Department of Agriculture
Federal Crop Insurance Corporation
Arizona-California Citrus Crop Provisions
If a conflict exists among the policy provisions, the order of
priority is as follows: (1) The Catastrophic Risk Protection
Endorsement, if applicable; (2) the Special Provisions; (3) these Crop
Provisions; and (4) the Basic Provisions with (1) controlling (2), etc.
1. Definitions
Carton. The standard container for marketing the fresh packed citrus
fruit crop as shown below. In the absence of marketing records on a
carton basis, production will be converted to cartons on the basis of
the following average net pounds of packed fruit in a standard packed
carton.
------------------------------------------------------------------------
Container size Fruit crop Pounds
------------------------------------------------------------------------
Container 58................ Navel oranges, Valencia 38
oranges & Sweet
oranges.
Container 58................ Lemons................. 40
Container 59................ Grapefruit............. 32
Container 63................ Tangerines (including 25
Tangelos) & Mandarin
oranges.
------------------------------------------------------------------------
Crop. Citrus fruit as listed in the Special Provisions.
Crop year. The period beginning with the date insurance attaches to
the citrus crop and extending through normal harvest time. It is
designated by the calendar year following the year in which the bloom is
normally set.
Dehorning. Cutting of any scaffold limb to a length that is not
greater than one-fourth (\1/4\) the height of the tree before cutting.
Direct marketing. Sale of the insured crop directly to consumers
without the intervention of an intermediary such as a wholesaler,
retailer, packer, processor, shipper or buyer. Examples of direct
marketing include selling through an on-farm or roadside stand, farmer's
market, and permitting the general public to enter the field for the
purpose of picking all or a portion of the crop.
Harvest. The severance of mature citrus from the tree by pulling,
picking, or any other means, or by collecting marketable fruit from the
ground.
Interplanted. Acreage on which two or more crops are planted in any
form of alternating or mixed pattern.
Scaffold limb. A major limb attached directly to the trunk.
Set out. Transplanting a tree into the grove.
Variety. Subclass of crop as listed in the Special Provisions.
2. Unit Division
(a) A basic unit, as defined in section 1 of the Basic Provisions,
will also be divided into additional basic units by each citrus crop
designated in the Special Provisions.
(b) Provisions in the Basic Provisions that allow optional units by
section, section equivalent, or FSA farm serial number and by irrigated
and non-irrigated practices are not applicable. Optional units may be
established only if each optional unit is located on non-contiguous
land, unless otherwise allowed by written agreement.
3. Insurance Guarantees, Coverage Levels, and Prices for Determining
Indemnities
(a) In addition to the requirements of section 3 (Insurance
Guarantees, Coverage Levels, and Prices for Determining Indemnities) of
the Basic Provisions (Sec. 457.8), you may select only one price
election and coverage level for each citrus fruit crop designated in the
Special Provisions that you elect to insure. The price election you
choose for each crop need not bear the same percentage relationship to
the maximum price offered by us for each crop. For example, if you
choose one hundred percent (100%) of the maximum price election for
sweet oranges, you may choose seventy-five percent (75%) of the maximum
price election for grapefruit. However, if separate price elections are
available by variety within each crop, the price elections you choose
for each variety must have
[[Page 191]]
the same percentage relationship to the maximum price offered by us for
each variety within the crop.
(b) In lieu of reporting your citrus production of marketable fresh
fruit for the previous crop year, as required by section 3 of the Basic
Provisions (Sec. 457.8), there is a lag period of one year. Each crop
year, you must report your production from two crop years ago, e.g., on
the 1998 crop year production report, you will provide your 1996 crop
year production.
(c) In addition, you must report, by the production reporting date
designated in section 3 (Insurance Guarantees, Coverage Levels, and
Prices for Determining Indemnities) of the Basic Provisions (Sec.
457.8), by type, if applicable:
(1) The number of trees damaged, dehorned or removed; any change in
practices or any other circumstance that may reduce the expected yield
below the yield upon which the insurance guarantee is based; and the
number of affected acres;
(2) The number of bearing trees on insurable and uninsurable
acreage;
(3) The age of the trees and the planting pattern; and
(4) For the first year of insurance for acreage interplanted with
another perennial crop, and anytime the planting pattern of such acreage
is changed:
(i) The age of the interplanted crop, and type, if applicable;
(ii) The planting pattern; and
(iii) Any other information that we request in order to establish
your approved yield.
We will reduce the yield used to establish your production guarantee
as necessary, based on our estimate of the effect of the following:
interplanted perennial crop; damage; dehorning; removal of trees; change
in practices and any other circumstance on the yield potential of the
insured crop. If you fail to notify us of any circumstance that may
reduce your yields from previous levels, we will reduce your production
guarantee as necessary at any time we become aware of the circumstance.
4. Contract Changes
In accordance with section 4 (Contract Changes) of the Basic
Provisions (Sec. 457.8), the contract change date is August 31
preceding the cancellation date.
5. Cancellation and Termination Dates
In accordance with section 2 (Life of Policy, Cancellation, and
Termination) of the Basic Provisions (Sec. 457.8), the cancellation and
termination dates are November 20.
6. Insured Crop
In accordance with section 8 (Insured Crop) of the Basic Provisions
(Sec. 457.8), the crop insured will be all the acreage in the county of
each citrus crop designated in the Special Provisions that you elect to
insure and for which a premium rate is provided by the actuarial
documents:
(a) In which you have a share;
(b) That is adapted to the area;
(c) That is irrigated;
(d) That is grown in a grove that, if inspected, is considered
acceptable by us;
(e) That is not sold by direct marketing, unless allowed by the
Special Provisions or by written agreement; and
(f) That has reached at least the sixth growing season after being
set out. However, we may agree to insure acreage that has not reached
this age if we inspect and approve a written agreement to insure such
acreage.
7. Insurable Acreage
In lieu of the provisions in section 9 (Insurable Acreage) of the
Basic Provisions (Sec. 457.8), that prohibit insurance attaching to a
crop planted with another crop, citrus interplanted with another
perennial crop is insurable unless we inspect the acreage and determine
it does not meet the requirements contained in your policy.
8. Insurance Period
(a) In accordance with the provisions of section 11 (Insurance
Period) of the Basic Provisions (Sec. 457.8):
(1) Coverage begins on November 21 of each crop year, except that
for the year of application, if your application is received after
November 11 but prior to November 21, insurance will attach on the 10th
day after your properly completed application is received in our local
office unless we inspect the acreage during the 10 day period and
determine that it does not meet insurability requirements. You must
provide any information that we require for the crop or to determine the
condition of the grove.
(2) The calendar date for the end of the insurance period for each
crop year is:
(i) August 31 for Navel oranges and Southern California lemons;
(ii) November 20 for Valencia oranges; and
(iii) July 31 for all other citrus crops.
(b) In addition to the provisions of section 11 (Insurance Period)
of the Basic Provisions (Sec. 457.8):
(1) If you acquire an insurable share in any insurable acreage after
coverage begins, but on or before the acreage reporting date for the
crop year, and after an inspection we consider the acreage acceptable,
insurance will be considered to have attached to such acreage on the
calendar date for the beginning of the insurance period.
(2) If you relinquish your insurable share on any insurable acreage
of citrus on or before the acreage reporting date for the crop year,
insurance will not be considered to have attached to and no premium will
be
[[Page 192]]
due, and no indemnity paid, for such acreage for that crop year unless:
(i) A transfer of coverage and right to an indemnity, or a similar
form approved by us, is completed by all affected parties;
(ii) We are notified by you or the transferee in writing of such
transfer on or before the acreage reporting date; and
(iii) The transferee is eligible for crop insurance.
9. Causes of Loss
(a) In accordance with the provisions of section 12 (Causes of Loss)
of the Basic Provisions (Sec. 457.8), insurance is provided only
against the following causes of loss that occur during the insurance
period:
(1) Adverse weather conditions;
(2) Fire, unless weeds and other forms of undergrowth have not been
controlled or pruning debris has not been removed from the grove;
(3) Wildlife;
(4) Earthquake;
(5) Volcanic eruption; or
(6) Failure of irrigation water supply, if caused by an insured
peril that occurs during the insurance period.
(b) In addition to the causes of loss excluded in section 12 (Causes
of Loss) of the Basic Provisions (Sec. 457.8), we will not insure
against damage or loss of production due to:
(1) Disease or insect infestation, unless adverse weather
conditions:
(i) Prevents the proper application of control measures or causes
properly applied control measures to be ineffective; or
(ii) Causes disease or insect infestation for which no effective
control mechanism is available;
(2) Inability to market the citrus for any reason other than actual
physical damage from an insurable cause specified in this section. For
example, we will not pay you an indemnity if you are unable to market
due to quarantine, boycott, or refusal of any person to accept
production.
10. Duties in the Event of Damage or Loss
In addition to the requirements of section 14 (Duties in the Event
of Damage or Loss) of the Basic Provisions (Sec. 457.8), the following
will apply:
(a) If the Special Provisions permit or a written agreement
authorizing direct marketing exists, you must notify us at least 15 days
before any production from any unit will be sold by direct marketing. We
will conduct an appraisal that will be used to determine your production
to count for production that is sold by direct marketing. If damage
occurs after this appraisal, we will conduct an additional appraisal.
These appraisals, and any acceptable records provided by you, will be
used to determine your production to count. Failure to give timely
notice that production will be sold by direct marketing will result in
an appraised amount of production to count of not less than the
production guarantee per acre if such failure results in our inability
to make the required appraisal.
(b) If you intend to claim an indemnity on any unit, you must notify
us before beginning to harvest any damaged production so that we may
have an opportunity to inspect it. You must not sell or dispose of the
damaged crop until after we have given you written consent to do so. If
you fail to meet the requirements of this section, all such production
will be considered undamaged and included as production to count.
11. Settlement of Claim
(a) We will determine your loss on a unit basis. In the event you
are unable to provide acceptable production records:
(1) For any optional unit, we will combine all optional units for
which such production records were not provided; or
(2) For any basic unit, we will allocate any commingled production
to such units in proportion to our liability on the harvested acreage
for each unit.
(b) In the event of loss or damage covered by this policy, we will
settle your claim by:
(1) Multiplying the insured acreage for each crop, or variety if
applicable, by its respective production guarantee;
(2) Multiplying the results of section 11(b)(1) by the respective
price election for each crop, or variety, if applicable;
(3) Totaling the results of section 11(b)(2);
(4) Multiplying the total production to be counted of each variety,
if applicable (see section 11(c)), by the respective price election;
(5) Totaling the results of section 11(b)(4);
(6) Subtracting this result of section 11(b)(5) from the result of
section 11(b)(3); and
(7) Multiplying the result of section 11(b)(6) by your share;
(c) The total production to count (in cartons) from all insurable
acreage on the unit will include:
(1) All appraised production as follows:
(i) Not less than the production guarantee per acre for acreage:
(A) That is abandoned;
(B) For which you fail to provide acceptable production records;
(C) That is damaged solely by uninsured causes; or
(D) From which production is sold by direct marketing, if direct
marketing is specifically permitted by the Special Provisions or a
written agreement, and you fail to meet the requirements contained in
section 10;
(ii) Production lost due to uninsured causes;
(iii) Unharvested production determined to be marketable as fresh
packed fruit; and
[[Page 193]]
(iv) Potential production on insured acreage that you intend to
abandon or no longer care for, if you and we agree on the appraised
amount of production. Upon such agreement, the insurance period for that
acreage will end. If you do not agree with our appraisal, we may defer
the claim only if you agree to continue to care for the crop. We will
then make another appraisal when you notify us of further damage or that
harvest is general in the area unless you harvested the crop, in which
case we will use the harvested production. If you do not continue to
care for the crop, our appraisal made prior to deferring the claim will
be used to determine the production to count;
(2) All harvested production marketed as fresh packed fruit from the
insurable acreage; and
(3) All citrus that was disposed of or sold without an inspection or
written consent.
(d) Any production will be considered marketed or marketable as
fresh packed fruit unless, due solely to insured causes, such production
was not marketed or marketable as fresh packed fruit.
(e) Citrus that cannot be marketed as fresh packed fruit due to
insurable causes will not be considered production to count.
(f) If we determine that frost protection equipment was not properly
utilized or not properly reported, the indemnity for the unit will be
reduced by the percentage of premium reduction allowed for frost
protection equipment. You must, at our request, provide us records
showing the start-stop times by date for each period the frost
protection equipment was used.
12. Late and Prevented Planting
The late and prevented planting provisions of the Basic Provisions
are not applicable.
[61 FR 44147, Aug. 28, 1996, as amended at 62 FR 65170, Dec. 10, 1997]
Sec. 457.122 Walnut crop insurance provisions.
The Walnut Crop Insurance Provisions for the 2001 and succeeding
crop years are as follows:
FCIC Policies
Department of Agriculture
Federal Crop Insurance Corporation
Reinsured Policies
(Appropriate title for insurance provider)
Both FCIC and reinsured policies:
Walnut Crop Provisions
If a conflict exists among the policy provisions, the order of
priority is as follows: (1) The Catastrophic Risk Protection
Endorsement, if applicable; (2) the Special Provisions; (3) these Crop
Provisions; and (4) the Basic Provisions with (1) controlling (2), etc.
1. Definitions
Harvest--Removal of the walnuts from the orchard.
Interplanted--Acreage on which two or more crops are planted in any
form of alternating or mixed pattern.
Net delivered weight--Delivered weight (pounds) of dry, hulled, in-
shell walnuts, excluding foreign material.
Pound--A unit of weight equal to 16 ounces avoirdupois.
Production guarantee (per acre)--The number of pounds (whole in-
shell walnuts), determined by multiplying the approved APH yield per
acre by the coverage level percentage you elect.
2. Unit Division
Provisions in the Basic Provisions that allow optional units by
section, section equivalent, or FSA farm serial number and by irrigated
and non-irrigated practices are not applicable. Optional units may be
established only if each optional unit is located on non-contiguous
land, unless otherwise allowed by written agreement.
3. Insurance Guarantees, Coverage Levels, and Prices for Determining
Indemnities
In addition to the requirements of section 3 of the Basic Provisions
(Sec. 457.8):
(a) You may select only one price election for all the walnuts in
the county insured under this policy unless the Special Provisions
provide different price elections by variety or varietal group, in which
case you may select one price election for each walnut variety or
varietal group designated in the Special Provisions. The price elections
you choose for each variety or varietal group must have the same
percentage relationship to the maximum price offered by us for each
variety or varietal group. For example, if you choose 100 percent of the
maximum price election for a specific variety or varietal group, you
must also choose 100 percent of the maximum price election for all other
varieties or varietal groups.
(b) You must report, by the production reporting date designated in
section 3 of the Basic Provisions (Sec. 457.8), by variety or varietal
group if applicable:
(1) Any damage, removal of trees, change in practices, or any other
circumstance that may reduce the expected yield below the yield upon
which the insurance guarantee is based, and the number of affected
acres;
(2) The number of bearing trees on insurable and uninsurable
acreage;
(3) The age of the trees and the planting pattern;
[[Page 194]]
(4) For the first year of insurance for acreage interplanted with
another perennial crop, and anytime the planting pattern of such acreage
is changed, the age of the crop that is interplanted with the walnuts,
and type if applicable, and the planting pattern; and
(5) Any other information that we request in order to establish your
approved yield.
We will reduce the yield used to establish your production guarantee
as necessary, based on our estimate of the effect of the following:
interplanted perennial crop; removal of trees; damage; change in
practices and any other circumstance on the yield potential of the
insured crop. If you fail to notify us of any circumstance that may
reduce your yields from previous levels, we will reduce your production
guarantee as necessary at any time we become aware of the circumstances.
(c) You may not increase your elected or assigned coverage level or
the ratio of your price election to the maximum price election if a
cause of loss that could or would reduce the yield of the insured crop
has occurred prior to the time that you request the increase.
4. Contract Changes
In accordance with section 4 of the Basic Provisions, the contract
change dates are October 31 for California and August 31 preceding the
cancellation date for all other states.
5. Cancellation and Termination Dates
In accordance with section 2 of the Basic Provisions, the
cancellation and termination dates are January 31 for California and
November 20 for all other states.
6. Insured Crop
In accordance with section 8 of the Basic Provisions (Sec. 457.8),
the crop insured will be all the commercially grown English Walnuts
(excluding black walnuts) in the county for which a premium rate is
provided by the actuarial documents:
(a) In which you have a share;
(b) That are grown on tree varieties that:
(1) Were commercially available when the trees were set out;
(2) Are adapted to the area; and
(3) Are grown on a root stock that is adapted to the area;
(c) That are grown in an orchard that, if inspected, are considered
acceptable by us;
(d) On acreage where at least 90 percent of the trees have reached
at least the ninth growing season after being set out, unless we agree
in writing to insure trees not meeting this requirement; and
(e) That are in a unit that consists of at least five acres, unless
we agree in writing to insure a smaller unit.
7. Insurable Acreage
In lieu of the provisions in section 9 of the Basic Provisions
(Sec. 457.8), that prohibit insurance attaching to a crop planted with
another crop, walnuts interplanted with another perennial crop are
insurable unless we inspect the acreage and determine that it does not
meet the requirements contained in your policy.
8. Insurance Period
(a) In accordance with the provisions of section 11 of the Basic
Provisions:
(1) Coverage begins on February 1 in California and November 21 in
all other states of each crop year, except that for the year of
application, if your application is received after January 22 but prior
to February 1 in California or after November 11 but prior to November
21 in all states, insurance will attach on the 10th day after your
properly completed application is received in our local office, unless
we inspect the acreage during the 10 day period and determine that it
does not meet insurability requirements. You must provide any
information that we require for the crop or to determine the condition
of the orchard.
(2) The calendar date for the end of the insurance period for each
crop year is November 15 (Exceptions, if any, for specific counties or
varieties or varietal group are contained in the Special Provisions).
(3) Notwithstanding paragraph (a)(1) of this section, for each
subsequent crop year that the policy remains continuously in force,
coverage begins on the day immediately following the end of the
insurance period for the prior crop year. Policy cancellation that
results solely from transferring to a different insurance provider for a
subsequent crop year will not be considered a break in continuous
coverage.
(4) If your walnut policy is canceled or terminated for any crop
year, in accordance with the terms of the policy, after insurance
attached for that crop year but on or before the cancellation and
termination dates whichever is later, insurance will not be considered
to have attached for that crop year and no premium, administrative fee,
or indemnity will be due for such crop year.
(b) In addition to the provisions of section 11 (Insurance Period)
of the Basic Provisions (Sec. 457.8):
(1) If you acquire an insurable share in any insurable acreage after
coverage begins but on or before the acreage reporting date for the crop
year, and after an inspection we consider the acreage acceptable,
insurance will be considered to have attached to such acreage on the
calendar date for the beginning of the insurance period. Acreage
acquired after the acreage reporting date will not be insured.
[[Page 195]]
(2) If you relinquish your insurable share on any insurable acreage
of walnuts on or before the acreage reporting date for the crop year,
insurance will not be considered to have attached to, and no premium or
indemnity will be due for such acreage for that crop year unless:
(i) A transfer of coverage and right to an indemnity, or a similar
form approved by us, is completed by all affected parties;
(ii) We are notified by you or the transferee in writing of such
transfer on or before the acreage reporting date; and
(iii) The transferee is eligible for crop insurance.
9. Causes of Loss
(a) In accordance with the provisions of section 12 of the Basic
Provisions (Sec. 457.8), insurance is provided only against the
following causes of loss that occur during the insurance period:
(1) Adverse weather conditions;
(2) Fire, unless weeds and undergrowth have not been controlled or
pruning debris has not been removed from the orchard;
(3) Insects, but not damage due to insufficient or improper
application of pest control measures;
(4) Plant disease, but not damage due to insufficient or improper
application of disease control measures;
(5) Wildlife;
(6) Earthquake;
(7) Volcanic eruption; or
(8) Failure of irrigation water supply, if caused by an insured
peril that occurs during the insurance period.
(b) In addition to the causes of loss excluded in section 12 (Causes
of Loss) of the Basic Provisions (Sec. 457.8), we will not insure
against any damage or loss of production due to the inability to market
the walnuts for any reason other than actual physical damage to the
walnuts from an insurable cause specified in this section. For example,
we will not pay you an indemnity if you are unable to market due to
quarantine, boycott, or refusal of any person to accept production.
10. Duties in the Event of Damage or Loss.
(a) In addition to the requirements of section 14 of the Basic
Provisions, if you intend to claim an indemnity on any unit:
(1) You must notify us prior to the beginning of harvest so that we
may inspect the damaged production;
(2) You must give notice when knowledge is obtained of any mold
damage or 15 days prior to harvest so that we may inspect the mold
damaged production; and
(3) You must not sell or dispose of the damaged crop until we have
given you written consent to do so.
(b) If you fail to meet the requirements of this section, all such
production will be considered undamaged and included as production to
count.
11. Settlement of Claim
(a) We will determine your loss on a unit basis. In the event you
are unable to provide separate acceptable production records:
(1) For any optional units, we will combine all optional units for
which such production records were not provided; or
(2) For any basic units, we will allocate any commingled production
to such units in proportion to our liability on the harvested acreage
for the units.
(b) In the event of loss or damage covered by this policy, we will
settle your claim by:
(1) Multiplying the insured acreage by the respective production
guarantee;
(2) Multiplying each result in section 11(b)(1) by the respective
price election for each variety or varietal group;
(3) Totaling the results in section 11(b)(2);
(4) Multiplying the total production to be counted of each variety
or varietal group, if applicable, (see section 11(c)) by the respective
price election;
(5) Totaling the results in section 11(b)(4);
(6) Subtracting the result in section 11(b)(5) from the result in
section 11(b)(3); and
(7) Multiplying the result in section 11(b)(6) by your share.
For example:
You have a 100 percent share in 100 acres of walnuts in the unit,
with a guarantee of 2,500 pounds per acre and a price election of $0.61
per pound. You are only able to harvest 200,000 pounds. Your indemnity
would be calculated as follows:
(1) 100 acres x 2,500 pounds = 250,000 pound insurance guarantee;
(2 & 3) 250,000 pounds x $0.61 price election = $152,500 total value
of insurance guarantee;
(4 & 5) 200,000 pounds production to count x $0.61 price election =
$122,000 total value of production to count;
(6) $152,500 total value guarantee--$122,000 total value of
production to count = $30,500 loss; and
(7) $30,500 x 100 percent share = $30,500 indemnity payment.
(c) The total production to count (whole in-shell pounds) from all
insurable acreage on the unit will include:
(1) All appraised production as follows:
(i) Not less than the production guarantee per acre for acreage:
(A) That is abandoned;
(B) That is damaged solely by uninsured causes; or
(C) For which you fail to provide acceptable production records;
(ii) Production lost due to uninsured causes;
(iii) Unharvested production; and
[[Page 196]]
(iv) Potential production on insured acreage that you intend to
abandon or no longer care for, if you and we agree on the appraised
amount of production. Upon such agreement, the insurance period for that
acreage will end. If you do not agree with our appraisal, we may defer
the claim only if you agree to continue to care for the crop. We will
then make another appraisal when you notify us of further damage or that
harvest is general in the area unless you harvested the crop, in which
case we will use the harvested production. If you do not continue to
care for the crop, our appraisal made prior to deferring the claim will
be used to determine the production to count; and
(2) All harvested production from the insurable acreage.
(d) Mature walnut production damaged due to an insurable cause of
loss which occurs within the insurance period may be adjusted for
quality based on an inspection by the Dried Fruit Association or during
our loss adjustment process. Walnut production that has mold damage
greater than 8 percent, based on the net delivered weight, will be
reduced by the quality adjustment factors contained in the Special
Provisions. Walnut production that exceeds 30 percent mold damage and
will not be sold, the production to count will be zero.
12. Late and Prevented Planting
The late and prevented planting provisions of the Basic Provisions
are not applicable.
[62 FR 20091, Apr. 25, 1997, as amended at 62 FR 65170, Dec. 10, 1997;
65 FR 47837, Aug. 4, 2000]
Sec. 457.123 Almond crop insurance provisions.
The Almond Crop Insurance Provisions for the 2001 and succeeding
crop years are as follows:
FCIC Policies
Department of Agriculture
Federal Crop Insurance Corporation
Reinsured Policies
(Appropriate title for insurance provider)
Both FCIC and Reinsured Policies
Almond Crop Provisions
If a conflict exists among the policy provisions, the order of
priority is as follows: (1) The Catastrophic Risk Protection
Endorsement, if applicable; (2) the Special Provisions; (3) these Crop
Provisions; and (4) the Basic Provisions with (1) controlling (2), etc.
1. Definitions
Harvest. The removal of mature almonds from the orchard.
Interplanted. Acreage on which two or more crops are planted in any
form of alternating or mixed pattern.
Meat pounds. The total pounds of almond meats (whole, chipped and
broken, and in-shell meats). In-shell almonds will be converted to meat
pounds in accordance with FCIC approved procedures.
Production guarantee (per acre). The quantity of almonds (total meat
pounds per acre) determined by multiplying the approved actual
production history (APH) yield per acre by the coverage level percentage
you elect.
Set out. Transplanting the tree into the orchard.
2. Unit Division
Provisions in the Basic Provisions that allow optional units by
section, section equivalent, or FSA farm serial number and by irrigated
and non-irrigated practices are not applicable. Optional units may be
established only if each optional unit is located on non-contiguous
land, unless otherwise allowed by written agreement.
3. Insurance Guarantees, Coverage Levels, and Prices for Determining
Indemnities
In addition to the requirements of section 3 of the Basic Provisions
(Sec. 457.8):
(a) You may select only one price election for all the almonds in
the county insured under this policy unless the Special Provisions
provide different price elections by type, in which case you may select
one price election for each almond type designated in the Special
Provisions. The price elections you choose for each type must have the
same percentage relationship to the maximum price offered by us for each
type. For example, if you choose 100 percent of the maximum price
election for one type, you must also choose 100 percent of the maximum
price election for all other types.
(b) You must report, by the production reporting date designated in
section 3 of the Basic Provisions (Sec. 457.8), by type if applicable:
(1) Any damage, removal of trees, change in practices, or any other
circumstance that may reduce the expected yield below the yield upon
which the insurance guarantee is based, and the number of affected
acres;
(2) The number of bearing trees on insurable and uninsurable
acreage;
(3) The age of the trees and the planting patterns;
(4) For the first year of insurance for acreage interplanted with
another perennial crop, and anytime the planting pattern of such acreage
is changed, the age of the crop that is interplanted with the almonds,
and
[[Page 197]]
type if applicable, and the planting pattern; and
(5) Any other information that we request in order to establish your
approved yield.
We will reduce the yield used to establish your production guarantee
as necessary, based on our estimate of the effect of the following:
interplanted perennial crop; removal of trees; damage; change in
practices and any other circumstance on the yield potential of the
insured crop. If you fail to notify us of any circumstance that may
reduce your yields from previous levels, we will reduce your production
guarantee as necessary at any time we become aware of the circumstance.
(c) You may not increase your elected or assigned coverage level or
the ratio of your price election to the maximum price election if a
cause of loss that would or could reduce the yield of the insured crop
has occurred prior to the time that you request the increase.
4. Contract Changes
In accordance with section 4 of the Basic Provisions (Sec. 457.8),
the contract change date is August 31 preceding the cancellation date.
5. Cancellation and Termination Dates
In accordance with section 2 of the Basic Provisions (Sec. 457.8),
the cancellation and termination dates are December 31.
6. Insured Crop
In accordance with section 8 of the Basic Provisions (Sec. 457.8),
the crop insured will be all the almonds in the county for which a
premium rate is provided by the actuarial documents:
(a) In which you have a share unless allowed otherwise by section
8(b);
(b) That are grown for harvest as almonds;
(c) That are irrigated;
(d) That are grown in an orchard that, if inspected, is considered
acceptable to us; and
(e) On acreage where at least 90 percent of the trees have reached
at least the seventh growing season after set out, unless we agree in
writing to insure trees not meeting this requirement.
7. Insurable Acreage
In lieu of the provisions in section 9 of the Basic Provisions
(Sec. 457.8), that prohibit insurance attaching to a crop planted with
another crop, almonds interplanted with another perennial crop are
insurable unless we inspect the acreage and determine that it does not
meet the requirements contained in your policy.
8. Insurance Period
(a) In accordance with the provisions of section 11 of the Basic
Provisions (Sec. 457.8):
(1) Coverage begins on January 1 of each crop year, except that for
the year of application, if your application is received after December
21, but prior to January 1, insurance will attach on the 10th day after
your properly completed application is received in our local office
unless we inspect the acreage during the 10 day period and determine
that it does not meet insurability requirements. You must provide any
information that we require for the crop or to determine the condition
of the orchard.
(2) The calendar date for the end of the insurance period for each
crop year is November 30.
(3) Notwithstanding paragraph (a)(1) of this section, for each
subsequent crop year that the policy remains continuously in force,
coverage begins on the day immediately following the end of the
insurance period for the prior crop year. Policy cancellation that
results solely from transferring to a different insurance provider for a
subsequent crop year will not be considered a break in continuous
coverage.
(4) If your almond policy is canceled or terminated for any crop
year, in accordance with the terms of the policy, after insurance
attached for that crop year but on or before the cancellation and
termination dates whichever is later, insurance will not be considered
to have attached for that crop year and no premium, administrative fee,
or indemnity will be due for such crop year.
(b) In addition to the provisions of section 11 (Insurance Period)
of the Basic Provisions (Sec. 457.8):
(1) If you acquire an insurable share in any insurable acreage after
coverage begins but on or before the acreage reporting date for the crop
year, and after an inspection we consider the acreage acceptable,
insurance will be considered to have attached to such acreage on the
calendar date for the beginning of the insurance period. Acreage
acquired after the acreage reporting date will not be insured.
(2) If you relinquish your insurable share on any insurable acreage
of almonds on or before the acreage reporting date for the crop year,
insurance will not be considered to have attached to, and no premium or
indemnity will be due for such acreage for that crop year unless:
(i) A transfer of coverage and right to an indemnity, or a similar
form approved by us, is completed by all affected parties;
(ii) We are notified by you or the transferee in writing of such
transfer on or before the acreage reporting date; and
(iii) The transferee is eligible for crop insurance.
[[Page 198]]
9. Causes of Loss
(a) In accordance with the provisions of section 12 of the Basic
Provisions (Sec. 457.8), insurance is provided only against the
following causes of loss that occur during the insurance period:
(1) Adverse weather conditions;
(2) Fire, unless weeds and undergrowth have not been controlled or
pruning debris has not been removed from the orchard;
(3) Insects, but not damage due to insufficient or improper
application of pest control measures;
(4) Plant disease, but not damage due to insufficient or improper
application of disease control measures;
(5) Earthquake;
(6) Volcanic eruption;
(7) Failure of the irrigation water supply, if caused by an insured
peril that occurs during the insurance period; or
(8) Wildlife, unless control measures have not been taken.
(b) In addition to the causes of loss excluded in section 12 (Causes
of Loss) of the Basic Provisions (Sec. 457.8), we will not insure
against damage or loss of production due to the inability to market the
almonds for any reason other than actual physical damage to the almonds
from an insurable cause specified in this section. For example, we will
not pay you an indemnity if you are unable to market due to quarantine,
boycott, or refusal of any person to accept production.
10. Duties in the Event of Damage or Loss
In addition to the requirements of section 14 of the Basic
Provisions (Sec. 457.8), if you intend to claim an indemnity on any
unit, you must notify us prior to the beginning of harvest so that we
may inspect the damaged production. You must not sell or dispose of the
damaged crop until after we have given you written consent to do so. If
you fail to meet the requirements of this section, all such production
will be considered undamaged and included as production to count.
11. Settlement of Claim
(a) We will determine your loss on a unit basis. In the event you
are unable to provide separate acceptable production records:
(l) For any optional units, we will combine all optional units for
which such production records were not provided; or
(2) For any basic units, we will allocate any commingled production
to such units in proportion to our liability on the harvested acreage
for the units.
(b) In the event of loss or damage covered by this policy, we will
settle your claim by:
(1) Multiplying the insured acreage by its respective production
guarantee;
(2) Multiplying each result in section 11(b)(1) by the respective
price election for the type;
(3) Totaling the results in section 11(b)(2);
(4) Multiplying the total production to be counted of each type, if
applicable, (see subsection 11(c)) by the respective price election;
(5) Totaling the results in section 11(b)(4);
(6) Subtracting the result in section 11(b)(5) from the result in
section 11(b)(3); and
(7) Multiplying the result in section 11(b)(6) by your share.
For example:
You have a 100 percent share in 100 acres of almonds in the unit,
with a guarantee of 1,200 pounds per acre and a price election of $1.70
per pound. You are only able to harvest 100,000 pounds. Your indemnity
would be calculated as follows:
(1) 100 acres x 1,200 pounds = 120,000 pound insurance guarantee;
(2 & 3) 120,000 pounds x $1.70 price election = $204,000 total value
of insurance guarantee;
(4 & 5) 100,000 pounds production to count x $1.70 price election =
$170,000 total value of production to count;
(6) $204,000 total of value guarantee--$170,000 total value of
production to count = $34,000 loss; and
(7) $34,000 x 100 percent share = $34,000 indemnity payment.
(c) The total production to count, specified in meat pounds, from
all insurable acreage on the unit will include:
(1) All appraised production as follows:
(i) Not less than the production guarantee per acre for acreage:
(A) That is abandoned;
(B) That is damaged solely by uninsured causes; or
(C) For which you fail to provide acceptable production records;
(ii) Production lost due to uninsured causes;
(iii) Unharvested production; and
(iv) Potential production on insured acreage that you intend to
abandon or no longer care for, if you and we agree on the appraised
amount of production. Upon such agreement, the insurance period for that
acreage will end. If you do not agree with our appraisal, we may defer
the claim only if you agree to continue to care for the crop. We will
then make another appraisal when you notify us of further damage or that
harvest is general in the area unless you harvested the crop, in which
case we will use the harvested production. If you do not continue to
care for the crop, our appraisal made prior to deferring the claim will
be used to determine the production to count; and
(2) All harvested meat pounds, including meat pounds damaged due to
uninsured causes of loss.
[[Page 199]]
12. Late and Prevented Planting
The late and prevented planting provisions of the Basic Provisions
are not applicable.
[62 FR 25108, May 8, 1997, as amended at 62 FR 65170, Dec. 10, 1997; 65
FR 47838, Aug. 4, 2000]
Sec. 457.124 Raisin crop insurance provisions.
The raisin crop insurance provisions for the 1998 and succeeding
crop years are as follows:
FCIC Policies
Department of Agriculture
Federal Crop Insurance Corporation
Reinsured Policies
(Appropriate title for insurance provider)
Both FCIC and Reinsured Policies
Raisin Crop Provisions
If a conflict exists among the policy provisions, the order of
priority is as follows: (1) The Catastrophic Risk Protection
Endorsement, if applicable; (2) the Special Provisions; (3) these Crop
Provisions; and (4) the Basic Provisions with (1) controlling (2), etc.
1. Definitions
Crop year--In lieu of the definition of ``Crop year'' contained in
section 1 of the Basic Provisions (Sec. 457.8), the calendar year in
which the raisins are placed on trays for drying.
Delivered ton--A ton of raisins delivered to a packer, processor,
buyer or a reconditioner, before any adjustment for U. S. Grade B and
better maturity standards, and after adjustments for moisture over 16
percent and substandard raisins over 5 percent.
RAC--The Raisin Administrative Committee, which operates under an
order of the United States Department of Agriculture (USDA).
Raisins--The sun-dried fruit of varieties of grapes designated
insurable by the actuarial documents. These grapes will be considered
raisins for the purpose of this policy when laid on trays in the
vineyard to dry.
Reference maximum dollar amount--The value per ton established by
FCIC and shown in the actuarial documents.
Substandard--Raisins that fail to meet the requirements of U.S.
Grade C, or layer (cluster) raisins with seeds that fail to meet the
requirements of U.S. Grade B.
Table grapes--Grapes grown for commercial sale as fresh fruit on
acreage where appropriate cultural practices were followed.
Ton--Two thousand (2,000) pounds avoirdupois.
Tonnage report--A report used to annually report, by unit, all the
tons of raisins produced in the county in which you have a share.
2. Unit Division
(a) A basic unit, as defined in section 1 of the Basic Provisions,
will be divided into additional basic units by grape variety.
(b) Provisions in the Basic Provisions that allow optional units by
section, section equivalent, or FSA farm serial number and by irrigated
and non-irrigated practices are not applicable. Optional units may be
established only if each optional unit is located on non-contiguous
land, unless otherwise allowed by written agreement.
3. Amounts of Insurance and Production Reporting
In addition to the requirements of section 3 (Insurance Guarantees,
Coverage Levels, and Prices for Determining Indemnities) of the Basic
Provisions (Sec. 457.8):
(a) You may select only one coverage level percentage for all the
raisins in the county insured under this policy.
(b) The amount of insurance for the unit will be determined by
multiplying the insured tonnage by the reference maximum dollar amount,
by the coverage level percentage you elect, and by your share.
(c) Insured tonnage is determined as follows:
(1) For units not damaged by rain--The delivered tons; or
(2) For units damaged by rain--By adding the delivered tons to any
verified loss of production due to rain damage. When production from a
portion of the acreage within a unit is removed from the vineyard and
production from the remaining acreage is lost in the vineyard, the
amount of production lost in the vineyard will be determined based on
the number of tons of raisins produced on the acreage from which
production was removed. When no production has been removed from the
vineyard, the amount of production lost in the vineyard will be
determined based on an appraisal.
(3) Insured tonnage will be adjusted as follows:
(i) The insured tonnage will be reduced 0.12 percent for each 0.10
percent of moisture in excess of 16.0 percent. For example, 10.0 tons of
raisins containing 18.0 percent moisture will be reduced to 9.760 tons
of raisins;
(ii) Insured tonnage used for dry edible fruit will be reduced by
0.10 percent for each 0.10 percent of substandard raisins in excess of
5.0 percent; and
(iii) When raisins contain moisture in excess of 24.3 percent at the
time of delivery and are released for a use other than dry edible fruit
(e.g. distillery material), they will
[[Page 200]]
be considered to contain 24.3 percent moisture.
(4) If any raisins are delivered, the moisture content will be
determined at the time of delivery.
(d) Section 3(c) of the Basic Provisions is not applicable to this
crop.
4. Contract Changes
In accordance with section 4 (Contract Changes) of the Basic
Provisions (Sec. 457.8), the contract change date is April 30 preceding
the cancellation date.
5. Cancellation and Termination Dates
In accordance with section 2 (Life of Policy, Cancellation and
Termination) of the Basic Provisions (Sec. 457.8), the cancellation and
termination dates are July 31.
6. Acreage Report and Tonnage Report
In lieu of the provisions contained in section 6 of the Basic
Provisions (Sec. 457.8):
(a) You must report by unit, and on our form, the acreage on which
you intend to produce raisins for the crop year. This acreage report
must be submitted to us on or before the sales closing date, and contain
the following information:
(1) All acreage of the crop (insurable and not insurable) in which
you will have a share;
(2) Your anticipated share at the time coverage will begin;
(3) The variety; and
(4) The location of each vineyard.
(b) Acreage of the crop acquired after the acreage was reported, may
be included on the acreage report if we agree to accept the additional
acreage. Such additional acreage will not be added to the acreage report
after you first place raisins from the additional acreage on trays for
drying. Failure to report any acreage in which you have a share will
result in denial of liability. If you elect not to produce raisins on
any part of the acreage included on your acreage report, you must notify
us in writing on or before September 21, and provide any records we may
require to verify that raisins were not produced on that acreage.
(c) If you fail to file an acreage report in a timely manner, or if
the information reported is incorrect, we may deny liability on any
unit.
(d) In addition to the acreage report, you must annually submit a
tonnage report, on our form, which includes by unit the number of
delivered tons of raisins, and, if damage has occurred, the amount of
any tonnage we determined was lost due to rain damage in the vineyard
for each unit designated in the acreage report.
(e) The tonnage report must be submitted to us as soon as the
information is available, but not later than March 1 of the year
following the crop year. Indemnities may be determined on the basis of
information you submitted on this report. If you do not submit this
report by the reporting date, we may, at our option, either determine
the insured tonnage and share by unit or we may deny liability on any
unit. This report may be revised only upon our approval. Errors in
reporting units may be corrected by us at any time we discover the
error.
7. Annual Premium
In lieu of the premium computation method contained in section 7
(Annual Premium) of the Basic Provisions (Sec. 457.8), the annual
premium amount is determined by multiplying the amount of insurance for
the unit at the time insurance attaches by the premium rate and then
multiplying that result by any applicable premium adjustment factors
that may apply.
8. Insured Crop
(a) In accordance with section 8 (Insured Crop) of the Basic
Provisions (Sec. 457.8), the crop insured will be all the raisins in
the county of grape varieties for which a premium rate is provided by
the actuarial documents and in which you have a share.
(b) In addition to the raisins not insurable under section 8
(Insured Crop) of the Basic Provisions (Sec. 457.8), we do not insure
any raisins:
(1) Laid on trays after September 8 in vineyards with north-south
rows in Merced or Stanislaus Counties, or after September 20 in all
other counties;
(2) From table grape strippings; or
(3) From vines that received manual, mechanical, or chemical
treatment to produce table grape sizing.
9. Insurance Period
In lieu of the provisions of section 11 (Insurance Period) of the
Basic Provisions (Sec. 457.8), insurance attaches on each unit at the
time the raisins are placed on trays for drying and ends the earlier of:
(a) October 20;
(b) The date the raisins are removed from the trays;
(c) The date the raisins are removed from the vineyard;
(d) Total destruction of all raisins on a unit;
(e) Final adjustment of a loss on a unit; or
(f) Abandonment of the raisins.
10. Causes of Loss
(a) In accordance with the provisions of section 12 (Causes of Loss)
of the Basic Provisions (Sec. 457.8), insurance is provided only
against unavoidable loss of production resulting from rain that occurs
during the insurance period and while the raisins are on trays or in
rolls in the vineyard for drying.
[[Page 201]]
(b) In addition to the causes of loss excluded in section 12 (Causes
of Loss) of the Basic Provisions (Sec. 457.8), we will not insure
against damage or loss of production due to inability to market the
raisins for any reason other than actual physical damage from an
insurable cause specified in this section. For example, we will not pay
you an indemnity if you are unable to market due to quarantine, boycott,
or refusal of a person to accept production.
11. Reconditioning Requirements and Payment
(a) We may require you to recondition a representative sample of not
more than 10 tons of damaged raisins to determine if they meet standards
established by the RAC once reconditioned. If such standards are met, we
may require you to recondition all the damaged production. If we
determine that it is possible to recondition any damaged production and,
if you do not do so, we will value the damaged production at the
reference maximum dollar amount, except if your damaged production
undergoes a USDA inspection and is stored by your packer with other
producer's production to be reconditioned at a later date. If we agree,
in writing, that it is not practical to recondition the damaged
production, we will determine the number of tons meeting RAC standards
that could be obtained if the production were reconditioned.
(b) If the representative sample of raisins that we require you to
recondition does not meet RAC standards for marketable raisins after
reconditioning, the reconditioning payment will be the actual cost you
incur to recondition the sample, not to exceed an amount that is
reasonable and customary for such reconditioning, regardless of the
coverage level selected.
(c) A reconditioning payment, based on the actual (unadjusted)
weight of the raisins, will be made if:
(1) Insured raisin production:
(i) Is damaged by rain within the insurance period;
(ii) Is reconditioned by washing with water and then drying;
(iii) Is insured at a coverage level greater than that applicable to
the catastrophic risk protection plan of insurance; and either
(2) The damaged production undergoes an inspection by USDA and is
found to contain mold, embedded sand, or other rain-caused contamination
determined by micro-analysis in excess of standards established by the
RAC, or is found to contain moisture in excess of 18 percent; or
(3) We give you consent to recondition the damaged production.
(d) Your request for consent to any wash-and-dry reconditioning must
identify the acreage on which the production to be reconditioned was
damaged in order to be eligible for a reconditioning payment.
(e) The reconditioning payment for raisins that meet RAC standards
for marketable raisins after reconditioning will be the lesser of your
actual cost for reconditioning or the amount determined by:
(1) Multiplying the greater of $125.00 or the reconditioning dollar
amount per ton contained in the Special Provisions by your coverage
level;
(2) Multiplying the result of section 11(e)(1) by the actual number
of tons of raisins (unadjusted weight) that are wash-and-dry
reconditioned; and
(3) Multiplying the result of section 11(e)(2) by your share.
(f) Only one reconditioning payment will be made for any lot of
raisins damaged during the crop year. Multiple reconditioning payments
for the same production will not be made.
12. Duties in the Event of Damage or Loss
(a) In addition to the requirements of section 14 (Duties in the
Event of Damage or Loss) of the Basic Provisions (Sec. 457.8), the
following will apply:
(1) If you intend to claim an indemnity on any unit, you must give
us notice within 72 hours of the time the rain fell on the raisins. We
may reject any claim for indemnity if such notice is later. You must
provide us the following information when you give us this notice:
(i) The grape variety;
(ii) The location of the vineyard and number of acres; and
(iii) The number of vines from which the raisins were harvested.
(2) We will not pay any indemnity unless you:
(i) Authorize us in writing to obtain all relevant records from any
raisin packer, raisin reconditioner, the RAC, or any other person who
may have such records. If you fail to meet the requirements of this
subsection, all insured production will be considered undamaged and
valued at the reference maximum dollar value.
(ii) Upon our request, provide us with records of previous years''
production and acreage. This information may be used to establish the
amount of insured tonnage when insurable damage results in discarded
production.
(b) In lieu of the provisions in section 14 (Duties in the Event of
Damage or Loss) of the Basic Provisions (Sec. 457.8) that require you
to submit a claim for indemnity not later than 60 days after the end of
the insurance period, any claim for indemnity must be submitted to us
not later than March 31 following the date for the end of the insurance
period.
[[Page 202]]
13. Settlement of Claim
(a) We will determine your loss on a unit basis. In the event you
are unable to provide separate acceptable production records:
(1) For any optional unit, we will combine all optional units for
which such production records were not provided; or
(2) For any basic unit, we will allocate any commingled production
to such units in proportion to our liability on the acreage from which
raisins were removed for each unit.
(b) In the event of loss or damage covered by this policy, we will
settle your claim by:
(1) Multiplying the insured tonnage of raisins by the reference
maximum dollar amount and your coverage level percentage;
(2) Subtracting from the total in section 13(b)(1) the total value
of all insured damaged and undamaged raisins; and
(3) Multiplying the result of section 13(b)(2) by your share.
(c) For the purpose of determining the amount of indemnity, your
share will not exceed the lesser of your share at the time insurance
attaches or at the time of loss.
(d) Undamaged raisins or raisins damaged solely by uninsured causes
will be valued at the reference maximum dollar amount.
(e) Raisins damaged partially by rain and partially by uninsured
causes will be valued at the highest prices obtainable, adjusted for any
reduction in value due to uninsured causes.
(f) Raisins that are damaged by rain, but that are reconditioned and
meet RAC standards for raisins, will be valued at the reference maximum
dollar amount.
(g) The value to count for any raisins produced on the unit that are
damaged by rain and not removed from the vineyard will be the larger of
the appraised salvage value or $35.00 per ton, except that any raisins
that are damaged and discarded from trays or are lost from trays
scattered in the vineyard as part of normal handling will not be
considered to have any value. You must box and deliver any raisins that
can be removed from the vineyard.
(h) At our sole option, we may acquire all the rights and title to
your share of any raisins damaged by rain. In such event, the raisins
will be valued at zero in determining the amount of loss and we will
have the right of ingress and egress to the extent necessary to take
possession, care for, and remove such raisins.
(i) Raisins destroyed, put to another use without our consent, or
abandoned will be valued at the reference maximum dollar amount.
14. Late and Prevented Planting
The late and prevented planting provisions of the Basic Provisions
are not applicable.
[62 FR 12070, Mar. 14, 1997, as amended at 62 FR 65170, Dec. 10, 1997]
Sec. 457.125 Safflower crop insurance provisions.
The safflower crop insurance provisions for the 2003 and succeeding
crop years are as follows:
FCIC Policies
United States Department of Agriculture
Federal Crop Insurance Corporation
Reinsured Policies
(Appropriate title for insurance provider)
Both FCIC and reinsured policies:
Safflower Crop Insurance Provisions
If a conflict exists among the policy provisions, the order of
priority is as follows: (1) The Catastrophic Risk Protection
Endorsement, if applicable; (2) the Special Provisions; (3) these Crop
Provisions; and (4) the Basic Provisions with (1) controlling (2), etc.
1. Definitions
Harvest. Collecting the safflower seed by combining or threshing.
Local market price. The cash price per pound for undamaged safflower
(test weight of 35 pounds per bushel or higher and seed damage less than
25 percent) offered by buyers.
Nurse crop (companion crop). A crop planted into the same acreage as
another crop, that is intended to be harvested separately, and which is
planted to improve growing conditions for the crop with which it is
grown.
Planted acreage--In addition to the definition contained in the
Basic Provisions, safflowers must initially be planted in rows, unless
otherwise provided by the Special Provisions, actuarial documents, or by
written agreement.
Pound. Sixteen ounces avoirdupois.
Value per pound. The cash price per pound for damaged safflower
(test weight below 35 pounds per bushel, seed damage in excess of 25
percent, or both).
2. Insurance Guarantees, Coverage Levels, and Prices for Determining
Indemnities
In addition to the requirements of section 3 (Insurance Guarantees,
Coverage Levels, and Prices for Determining Indemnities) of the Basic
Provisions (Sec. 457.8), you may select only one price election for all
the safflower in the county insured under this policy unless the Special
Provisions provide different price elections by type, in which case you
may select one price election for each safflower type designated in the
Special Provisions. The price elections you choose for each type must
have the same percentage relationship to the maximum price offered by us
for each type. For example, if you choose
[[Page 203]]
100 percent of the maximum price election for one type, you must also
choose 100 percent of the maximum price election for all other types.
3. Contract Changes
In accordance with section 4 (Contract Changes) of the Basic
Provisions (Sec. 457.8), the contract change date is August 31
preceding the cancellation date for California, and December 31
preceding the cancellation date for all other states.
4. Cancellation and Termination Dates
In accordance with section 2 (Life of Policy, Cancellation, and
Termination) of the Basic Provisions (Sec. 457.8), the cancellation and
termination dates are:
------------------------------------------------------------------------
Cancellation and termination
State dates
------------------------------------------------------------------------
California............................. December 31.
All other states....................... March 15.
------------------------------------------------------------------------
5. Insured Crop
In accordance with section 8 (Insured Crop) of the Basic Provisions
(Sec. 457.8), the crop insured will be all safflower in the county for
which a premium rate is provided by the actuarial documents:
(a) In which you have a share;
(b) That is planted for harvest as safflower seed;
(c) That is not (unless allowed by the Special Provisions or by
written agreement):
(1) Interplanted with another crop; or
(2) Planted into an established grass or legume.
6. Insurable Acreage
In addition to the provisions of section 9 (Insurable Acreage) of
the Basic Provisions (Sec. 457.8), we will not insure:
(a) Safflower planted on land on which safflower, sunflower seed,
any variety of dry beans, soybeans, mustard, rapeseed, or lentils were
grown the preceding crop year, unless other rotation requirements are
specified in the Special Provisions or we agree in writing to insure
such acreage; or
(b) Any acreage of safflower damaged before the final planting date,
to the extent that the majority of producers in the area would normally
not further care for the crop, unless the crop is replanted or we agree
that it is not practical to replant.
7. Insurance Period
In accordance with the provisions of section 11 (Insurance Period)
of the Basic Provisions (Sec. 457.8), the calendar date for the end of
the insurance period is October 31 immediately following planting.
8. Causes of Loss
In accordance with the provisions of section 12 (Causes of Loss) of
the Basic Provisions (Sec. 457.8), insurance is provided only against
the following causes of loss that occur during the insurance period:
(a) Adverse weather conditions;
(b) Fire;
(c) Insects, but not damage due to insufficient or improper
application of pest control measures;
(d) Plant disease, but not damage due to insufficient or improper
application of disease control measures;
(e) Wildlife, unless proper measures to control wildlife have not
been taken;
(f) Earthquake;
(g) Volcanic eruption; or
(h) Failure of the irrigation water supply, if caused by an insured
cause of loss that occurs during the insurance period.
9. Replanting Payment
(a) In accordance with section 13 (Replanting Payment) of the Basic
Provisions (Sec. 457.8), a replanting payment is allowed if the crop is
damaged by an insurable cause of loss to the extent that the remaining
stand will not produce at least 90 percent of the production guarantee
for the acreage and it is practical to replant.
(b) The maximum amount of the replanting payment per acre will be
the lesser of 20 percent of the production guarantee or 160 pounds,
multiplied by your price election, multiplied by your insured share.
(c) When safflower is replanted using a practice that is uninsurable
as an original planting, the liability on the unit will be reduced by
the amount of the replanting payment. The premium amount will not be
reduced.
10. Duties in the Event of Damage or Loss
In accordance with the requirements of section 14 (Duties in the
Event of Damage or Loss) of the Basic Provisions (Sec. 457.8), the
representative samples of the unharvested crop must be at least 10 feet
wide and extend the entire length of each field in the unit. The samples
must not be harvested or destroyed until the earlier of our inspection
or 15 days after harvest of the balance of the unit is completed.
11. Settlement of Claim
(a) We will determine your loss on a unit basis. In the event you
are unable to provide separate acceptable production records:
(1) For any optional unit, we will combine all optional units for
which such production records were not provided; or
(2) For any basic unit, we will allocate any commingled production
to such units in proportion to our liability on the harvested acreage
for the unit.
[[Page 204]]
(b) In the event of loss or damage covered by this policy, we will
settle your claim by:
(1) Multiplying the insured acreage by its respective production
guarantee;
(2) Multiplying each result in section 11(b)(1) by the respective
price election;
(3) Totaling the results in section 11(b)(2);
(4) Multiplying the total production to be counted of each type if
applicable, (see section 11(c)) by the respective price election;
(5) Totaling the results in section 11(b)(4);
(6) Subtracting the results from the total in section 11(b)(5) from
the results in section 11(b)(3); and
(7) Multiplying the result in section 11(b)(6) by your share.
(c) The total production to count (in pounds) from all insurable
acreage on the unit will include:
(1) All appraised production as follows:
(i) Not less than the production guarantee per acre for the acreage:
(A) That is abandoned;
(B) Put to another use without our consent;
(C) That is damaged solely by uninsured causes; or
(D) For which you fail to provide acceptable production records;
(ii) Production lost due to uninsured causes;
(iii) Unharvested production (mature unharvested production may be
adjusted for quality deficiencies and excess moisture in accordance with
section 11(d)); and
(iv) Potential production on insured acreage that you intend to put
to another use or abandon, if you and we agree on the appraised amount
of production. Upon such agreement, the insurance period for that
acreage will end when you put the acreage to another use or abandon the
crop. If agreement on the appraised amount of production is not reached:
(A) If you do not elect to continue to care for the crop, we may
give you consent to put the acreage to another use if you agree to leave
intact, and provide sufficient care for, representative samples of the
crop in locations acceptable to us (The amount of production to count
for such acreage will be based on the harvested production or appraisals
from the samples at the time harvest should have occurred. If you do not
leave the required samples intact, or fail to provide sufficient care
for the samples, our appraisal made prior to giving you consent to put
the acreage to another use will be used to determine the amount of
production to count); or
(B) If you elect to continue to care for the crop, the amount of
production to count for the acreage will be the harvested production, or
our reappraisal if additional damage occurs and the crop is not
harvested; and
(2) All harvested production from the insurable acreage.
(d) Mature safflower may be adjusted for excess moisture and quality
deficiencies. If moisture adjustment is applicable, it will be made
prior to any adjustment for quality.
(1) Production will be reduced by 0.12 percent for each 0.1
percentage point of moisture in excess of 8 percent. We may obtain
samples of the production to determine the moisture content.
(2) Production will be eligible for quality adjustment if such
production:
(i) Has a test weight below 35 pounds per bushel;
(ii) Has seed damage in excess of 25 percent; or
(iii) Contains substances or conditions that are identified by the
Food and Drug Administration or other public health organizations of the
United States as being injurious to human or animal health.
(3) Quality will be a factor in determining your loss only if:
(i) The deficiencies, substances, or conditions resulted from a
cause of loss against which insurance is provided under these crop
provisions and that occurred within the insurance period;
(ii) The deficiencies, substances, or conditions result in a value
per pound that is less than the local market price;
(iii) All determinations of these deficiencies, substances, or
conditions are made using samples of the production obtained by us or by
a disinterested third party approved by us;
(iv) With regard to deficiencies in quality (except test weight,
which may be determined by our loss adjuster), the samples are analyzed
by:
(A) A grader licensed under the United States Agricultural Marketing
Act or the United States Warehouse Act;
(B) A grader licensed under State law and employed by a warehouse
operator who has a storage agreement with the Commodity Credit
Corporation; or
(C) A grader not licensed under State law, but who is employed by a
warehouse operator who has a commodity storage agreement with the
Commodity Credit Corporation and is in compliance with State law
regarding warehouses; and
(v) With regard to substances or conditions injurious to human or
animal health, the samples are analyzed by a laboratory approved by us.
(4) Safflower production that is eligible for quality adjustment, as
specified in sections 11(d) (2) and (3), will be reduced as follows:
(i) In accordance with the quality adjustment factors contained in
the Special Provisions; or
(ii) If quality adjustment factors are not contained in the Special
Provisions:
(A) By determining the value per pound and the local market price on
the earlier of the date such quality adjusted production is
[[Page 205]]
sold or the date of final inspection for the unit. Discounts used to
establish the value per pound will be limited to those which are usual,
customary, and reasonable. The value per pound will not be reduced for:
(1) Moisture content;
(2) Damage due to uninsured causes; or
(3) Drying, handling, processing, or any other costs associated with
normal harvesting, handling, and marketing of safflower. We may obtain
values per pound from any buyer of our choice. If we obtain values per
pound from one or more buyers located outside your local market area, we
will reduce such values per pound by the additional costs required to
deliver the production to those buyers.
(B) Divide the value per pound by the local market price to
determine the quality adjustment factor; and
(C) Multiply the adjustment factor by the number of pounds of the
damaged production remaining after any reduction due to excessive
moisture to determine the net production to count.
(e) Any production harvested from other plants growing in the
insured crop may be counted as production of the insured crop on a
weight basis.
12. Prevented Planting
Your prevented planing coverage will be 60 percent of your
production guarantee for timely planted acreage. If you have limited or
aditional levels of coverage, as specified in 7 CFR part 400, subpart T,
and pay an additional premium, you may increase your prevented planting
coverage to a level specified in the actuarial documents.
[62 FR 42649, Aug. 8, 1997, as amended at 62 FR 65171, Dec. 10, 1997; 67
FR 55690, Aug. 30, 2002]
Sec. 457.126 Popcorn cop isurance povisions.
The Popcorn Crop Insurance Provisions for the 1999 and succeeding
crop years are as follows:
FCIC Policies
United States Department of Agriculture
Federal Crop Insurance Corporation
Reinsured Policies
(Appropriate title for insurance provider)
Both FCIC and reinsured policies:
Popcorn Crop Insurance Provisions
If a conflict exists among the policy provisions, the order of
priority is as follows: (1) The Catastrophic Risk Protection
Endorsement, if applicable; (2) the Special Provisions; (3) these Crop
Provisions; and (4) the Basic Provisions with (1) controlling (2), etc.
1. Definitions
Base contract price. The price stipulated on the contract executed
between you and the processor before any adjustments for quality.
Harvest. Removing the grain or ear from the stalk either by hand or
by machine.
Merchantable popcorn. Popcorn that meets the provisions of the
processor contract.
Planted acreage. In addition to the definition contained in the
Basic Provisions, popcorn must initially be planted in rows far enough
apart to permit mechanical cultivation, unless otherwise provided by the
Special Provisions, actuarial documents, or by written agreement.
Pound. Sixteen (16) ounces avoirdupois.
Practical to replant. In addition to the definition contained in the
Basic Provisions, it will not be considered practical to replant unless
production from the replanted acreage can be delivered under the terms
of the popcorn processor contract, or the processor agrees in writing
that it will accept the production from the replanted acreage.
Processor. Any business enterprise regularly engaged in processing
popcorn that possesses all licenses, permits or approved inspections for
processing popcorn required by the state in which it operates, and that
possesses facilities, or has contractual access to such facilities, with
enough equipment to accept and process the contracted popcorn within a
reasonable amount of time after harvest.
Processor contract. A written agreement between the producer and a
processor, containing at a minimum:
(a) The producer's commitment to plant and grow popcorn, and to
deliver the popcorn production to the processor;
(b) The processor's commitment to purchase all the production stated
in the processor contract;
(c) A date, if specified on the processor's contract, by which the
crop must be harvested to be accepted; and
(d) A base contract price.
Multiple contracts with the same processor, each of which stipulates a
specific amount of production to be delivered under the terms of the
processor contact, will be considered as a single processor contract.
2. Unit Division
(a) For processor contracts that stipulate the amount of production
to be delivered:
(1) In lieu of the definition contained in the Basic Provisions, a
basic unit will consist of all the acreage planted to the insured crop
in the county that will be used to fulfill contracts with each
processor;
[[Page 206]]
(i) There will be no more than one basic unit for all production
contracted with each processor contract;
(ii) In accordance with section 13 of these Crop Provisions, all
production from any basic unit in excess of the amount under contract
will be included as production to count if such production is applied to
any other basic unit for which the contracted amount has not been
fulfilled; and
(2) Provisions in the Basic Provisions that allow optional units by
section, section equivalent, or FSA farm serial number and by irrigated
and non-irrigated practices are not applicable.
(b) For any processor contract that stipulates only the number of
acres to be planted, the provisions contained in section 34 of the Basic
Provisions will apply.
3. Insurance Guarantees, Coverage Levels, and Prices for Determining
Indemnities
In addition to the requirements of section 3 of the Basic
Provisions, you may select only one price election for all the popcorn
in the county insured under this policy unless the Special Provisions
provide different price elections by type, in which case you may select
one price election for each popcorn type designated in the Special
Provisions. The price elections you choose for each type must have the
same percentage relationship to the maximum price offered by us for each
type. For example, if you choose 100 percent of the maximum price
election for one type, you must also choose 100 percent of the maximum
price election for all other types.
4. Contract Changes
In accordance with section 4 of the Basic Provisions, the contract
change date is November 30 preceding the cancellation date.
5. Cancellation and Termination Dates
In accordance with section 2 of the Basic Provisions, the
cancellation and termination dates are:
------------------------------------------------------------------------
Cancellation and termination
State and county dates
------------------------------------------------------------------------
Val Verde, Edwards, Kerr, Kendall, Bexar, January 15.
Wilson, Karnes, Goliad, Victoria, and
Jackson counties Texas, and all Texas
counties lying south thereof.
All other Texas counties and all other March 15.
states.
------------------------------------------------------------------------
6. Report of Acreage
In addition to the provisions of section 6 of the Basic Provisions,
you must provide a copy of all processor contracts to us on or before
the acreage reporting date.
7. Insured Crop
(a) In accordance with section 8 of the Basic Provisions, the crop
insured will be all the popcorn in the county for which a premium rate
is provided by the actuarial documents:
(1) In which you have a share;
(2) That is planted for harvest as popcorn;
(3) That is grown under, and in accordance with the requirements of,
a processor contract executed on or before the acreage reporting date
and is not excluded from the processor contract at any time during the
crop year; and
(4) That is not (unless allowed by the Special Provisions or by
written agreement):
(i) Interplanted with another crop; or
(ii) Planted into an established grass or legume.
(b) You will be considered to have a share in the insured crop if,
under the processor contract, you retain control of the acreage on which
the popcorn is grown, you have a risk of loss, and the processor
contract provides for delivery of popcorn under specified conditions and
at a stipulated base contract price.
(c) A popcorn producer who is also a processor may be able to
establish an insurable interest if the following requirements are met:
(1) The producer must comply with these Crop Provisions;
(2) The Board of Directors or officers of the processor must, prior
to the sales closing date, execute and adopt a resolution that contains
the same terms as an acceptable processor contract. Such resolution will
be considered a processor contract under this policy; and
(3) Our inspection reveals that the processing facilities comply
with the definition of a processor contained in these Crop Provisions.
8. Insurable Acreage
In addition to the provisions of section 9 of the Basic Provisions,
any acreage of the insured crop damaged before the final planting date,
to the extent that the majority of producers in the area would normally
not further care for the crop, must be replanted unless we agree that it
is not practical to replant.
9. Insurance Period
In lieu of the provisions contained in section 11 of the Basic
Provisions, regarding the end of the insurance period, insurance ceases
on each unit or part of a unit at the earliest of:
(a) The date the popcorn:
(1) Was destroyed;
(2) Should have been harvested but was not harvested;
(3) Was abandoned; or
[[Page 207]]
(4) Was harvested;
(b) When the processor contract stipulates a specific amount of
production to be delivered, the date the production accepted by the
processor equals the contracted amount of production;
(c) Final adjustment of a loss; or
(d) December 10 immediately following planting.
10. Causes of Loss
(a) In accordance with the provisions of section 12 of the Basic
Provisions, insurance is provided only against the following causes of
loss that occur during the insurance period:
(1) Adverse weather conditions;
(2) Fire;
(3) Insects, but not damage due to insufficient or improper
application of pest control measures;
(4) Plant disease, but not damage due to insufficient or improper
application of disease control measures;
(5) Wildlife;
(6) Earthquake;
(7) Volcanic eruption; or
(8) Failure of the irrigation water supply, if caused by a cause of
loss specified in sections 10(a)(1) through (7) that occurs during the
insurance period.
(b) In addition to the causes of loss excluded by section 12 of the
Basic Provisions, we do not insure against any loss of production due
to:
(1) Damage resulting from frost or freeze after the date designated
in the Special Provisions; or
(2) Failure to follow the requirements contained in the processor
contract.
11. Replanting Payment
(a) In accordance with section 13 of the Basic Provisions, a
replanting payment is allowed if the crop is damaged by an insurable
cause of loss to the extent that the remaining stand will not produce at
least 90 percent of the production guarantee for the acreage and it is
practical to replant.
(b) The maximum amount of the replanting payment per acre will be
the lesser of 20 percent of the production guarantee or 150 pounds,
multiplied by your price election, multiplied by your insured share.
(c) When popcorn is replanted using a practice that is uninsurable
as an original planting, our liability for the unit will be reduced by
the amount of the replanting payment. The premium amount will not be
reduced.
12. Duties in the Event of Damage or Loss
In accordance with the requirements of section 14 of the Basic
Provisions, the representative samples of the unharvested crop must be
at least 10 feet wide and extend the entire length of each field in the
unit. The samples must not be destroyed until the earlier of our
inspection or 15 days after harvest of the balance of the unit is
completed.
13. Settlement of Claim
(a) We will determine your loss on a unit basis. In the event you
are unable to provide acceptable production records:
(1) For any optional unit, we will combine all optional units for
which such production records were not provided; or
(2) For any basic unit, we will allocate any commingled production
to such units in proportion to our liability on the harvested acreage
for each unit.
(b) In the event of loss or damage covered by this policy, we will
settle your claim by:
(1) Multiplying the insured acreage for each type, if applicable, by
its respective production guarantee;
(2) Multiplying the result of section 13(b)(1) by the respective
price election for each type, if applicable;
(3) Totaling the results of section 13(b)(2) if there is more than
one type;
(4) Multiplying the total production to count (see section 13(c)),
of each type if applicable, by its respective price election;
(5) Totaling the results of section 13(b)(4) if there is more than
one type;
(6) Subtracting the result of section 13(b)(4) from the result in
section 13(b)(2) if there is only one type or subtracting the result of
section 13(b)(5) from the result of section 13(b)(3) if there is more
than one type; and
(7) Multiplying the result of section 13(b)(6) by your share.
For example:
You have a 100 percent share in 100 acres of Type A popcorn in the unit,
with a guarantee of 2,500 pounds per acre and a price election of $.12
per pound. You are only able to harvest 150,000 pounds. Your indemnity
would be calculated as follows:
1.................... 100 acres x 2,500 pounds = 250,000 pound
guarantee;
2.................... 250,00 pounds x $.12 price election = $30,000
value of guarantee;
4.................... 150,000 pounds production to count x $.12 price
election = $18,000 value of production to count;
6.................... $30,000-$18,000 = $12,000 loss; and
7.................... $12,000 x 100 percent share = $12,000 indemnity
payment.
[[Page 208]]
You also have a 100 percent share in 150 acres of type B popcorn in the
same unit, with a guarantee of 2,250 pounds per acre and a price
election of $.10 per pound. You are only able to harvest 70,000 pounds.
Your total indemnity for both popcorn types A and B would be calculated
as follows:
1.................... 100 acres x 2,500 pounds = 250,000 guarantee for
type A and 150 acres x 2,250 pounds = 337,500
pound guarantee for type B;
2.................... 250,000 pound guarantee x $.12 price election =
$30,000 value of guarantee for type A and
337,500 pound guarantee x $.10 price election =
$33,750 value guarantee for type B;
3.................... $30,000 + $33,750 = $63,750 total value
guarantee;
4.................... 150,000 pounds x $.12 price election = $18,000
value of production to count for type A and
70,000 pounds x $.10 price election = $7,000
value of production to count for type B;
5.................... $18,000 + $7,000 = $25,000 total value of
production to count;
6.................... $63,750-$25,000 = $38,750 loss; and
7.................... $38,750 x 100 percent = $38,750 indemnity
payment.
(c) The total production to count (in pounds) from all insurable
acreage on the unit will include:
(1) All appraised production as follows:
(i) Not less than the production guarantee for acreage:
(A) That is abandoned;
(B) Put to another use without our consent;
(C) Damaged solely by uninsured causes; or
(D) For which you fail to provide production records;
(ii) Unharvested production (mature unharvested production may be
adjusted for quality deficiencies and excess moisture in accordance with
section 13(d));
(iii) Potential production on insured acreage that you intend to put
to another use or abandon, if you and we agree on the appraised amount
of production. Upon such agreement, the insurance period for that
acreage will end when you put the acreage to another use or abandon the
crop. If agreement on the appraised amount of production is not reached:
(A) If you do not elect to continue to care for the crop, we may
give you consent to put the acreage to another use if you agree to leave
intact, and provide sufficient care for, representative samples of the
crop in locations acceptable to us (The amount of production to count
for such acreage will be based on the harvested production or appraisals
from the samples at the time harvest should have occurred. If you do not
leave the required samples intact, or fail to provide sufficient care
for the samples, our appraisal made prior to giving you consent to put
the acreage to another use will be used to determine the amount of
production to count); or
(B) If you elect to continue to care for the crop, the amount of
production to count for the acreage will be the harvested production, or
our reappraisal if additional damage occurs and the crop is not
harvested;
(2) All harvested production from the insurable acreage in the unit;
(3) All harvested and appraised production lost or damaged by
uninsured causes; and
(4) For processor contracts that stipulate the amount of production
to be delivered, all harvested popcorn production from any other
insurable unit that has been used to fulfill your processor contract
applicable to this unit.
(5) Any production from yellow or white dent corn will be counted as
popcorn on a weight basis and any production harvested from plants
growing in the insured crop may be counted as popcorn production on a
weight basis.
(6) Any ear production for which we cannot determine a shelling
factor will be considered to have an 80 percent shelling factor.
(d) Mature popcorn may be adjusted for excess moisture and quality
deficiencies. If moisture adjustment is applicable, it will be made
prior to any adjustment for quality.
(1) Production will be reduced by 0.12 percent for each 0.1
percentage point for moisture in excess of 15 percent. We may obtain
samples of the production to determine the moisture content.
(2) Popcorn production will be eligible for quality adjustment if,
due to an insurable cause of loss that occurs within the insurance
period, it is not merchantable popcorn and is rejected by the processor.
The production will be adjusted by:
(i) Dividing the value per pound of the damaged popcorn by the base
contract price per pound for undamaged popcorn; and
(ii) Multiplying the result by the number of pounds of such popcorn.
[[Page 209]]
14. Late Planting
Late planting provisions in the Basic Provisions are applicable for
popcorn if you provide written approval from the processor by the
acreage reporting date that it will accept the production from the late
planted acres when it is expected to be ready for harvest.
15. Prevented Planting
Your prevented planting coverage will be 60 percent of your
production guarantee for timely planted acreage. If you have limited or
additional levels of coverage, as specified in 7 CFR part 400, subpart
T, and pay an additional premium, you may increase your prevented
planting coverage to a level specified in the actuarial documents.
[63 FR 33838, June 22, 1998]
Sec. 457.127 [Reserved]
Sec. 457.128 Guaranteed production plan of fresh market tomato crop
insurance provisions.
The Guaranteed Production Plan of Fresh Market Tomato Crop Insurance
FCIC Policies
Department of Agriculture
Federal Crop Insurance Corporation
Reinsured Policies
(Appropriate title for insurance provider)
Both FCIC and reinsured policies:
Guarantee Production Plan of Fresh Market Tomato Crop Provisions
If a conflict exists among the policy provisions, the order of
priority is as follows: (1) The Catastrophic Risk Protection
Endorsement, if applicable; (2) the Special Provisions; (3) these Crop
Provisions; and (4) the Basic Provisions with (1) controlling (2), etc.
1. Definitions
Acre--Forty-three thousand five hundred sixty (43,560) square feet
of land when row widths do not exceed six feet, or if row widths exceed
six feet, the land area on which at least 7,260 linear feet of rows are
planted.
Carton--A container that contains 25 pounds of fresh tomatoes unless
otherwise provided in the Special Provisions.
Direct marketing--Sale of the insured crop directly to consumers
without the intervention of an intermediary such as a wholesaler,
retailer, packer, processor, shipper or buyer. Examples of direct
marketing include selling through an on-farm or roadside stand, farmer's
market, and permitting the general public to enter the field for the
purpose of picking all or a portion of the crop.
First fruit set--The date when 30 percent of the plants on the unit
have produced fruit that has reached a minimum size of one inch in
diameter.
Harvest--Picking of marketable tomatoes.
Mature green tomato--A tomato that:
(a) Has a heightened gloss due to a waxy skin that cannot be torn by
scraping;
(b) Has a well-formed jelly-like substance in the locules;
(c) Has seeds that are sufficiently hard so they are pushed aside
and not cut by a sharp knife in slicing; and
(d) Shows no red color.
Planting--Transplanting the tomato plants into the field.
Planting period--The time period designated in the Special
Provisions during which the tomatoes must be planted to be insured as
either spring-or fall-planted tomatoes.
Plant stand--The number of live plants per acre before any damage
occurs.
Potential production--The number of cartons per acre of mature green
or ripe tomatoes that the tomato plants would have produced by the end
of the insurance period:
(a) With a classification size of 6x7 (2-8/32 inch minimum diameter)
or larger for all types except cherry, roma, or plum; or
(b) Meeting the criteria specified in the Special Provisions for
cherry, roma, or plum types.
Practical to replant--In lieu of the definition of ``Practical to
replant'' contained in section 1 of the Basic Provisions (Sec. 457.8),
practical to replant is defined as our determination, after loss or
damage to the insured crop, based on factors, including but not limited
to moisture availability, condition of the field, time to crop maturity,
and marketing windows that replanting the insured crop will allow the
crop to attain maturity prior to the calendar date for the end of the
insurance period. In counties that do not have both spring and fall
planting periods, it will not be considered practical to replant after
the final planting date unless replanting is generally occurring in the
area. In counties that have spring and fall planting periods, it will
not be considered practical to replant after the final planting date for
the planting period in which the crop was initially planted.
Ripe tomato--A tomato that meets the definition of a mature green
tomato, except the tomato shows some red color and can still be packed
for fresh market under the agreement or contract with the packer.
Row width--The distance in feet from the center of one row of plants
to the center of an adjacent row.
2. Unit Division
(a) A basic unit, as defined in section 1 of the Basic Provisions,
will be divided into additional basic units by planting period, if
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separate planting periods are provided for in the Special Provisions.
(b) Provisions in the Basic Provisions that allow optional units by
irrigated and non-irrigated practices are not applicable.
3. Insurance Guarantees, Coverage Levels, and Prices for Determining
Indemnities
In addition to the requirements of section 3 (Insurance Guarantees,
Coverage Levels, and Prices for Determining Indemnities) of the Basic
Provisions (Sec. 457.8):
(a) You may select only one price election for all the tomatoes in
the county insured under this policy unless the Special Provisions
provide different price elections by type, in which case you may select
one price election for each tomato type designated in the Special
Provisions. The price election you choose for each type must have the
same percentage relationship to the maximum price offered by us for each
type. For example, if you choose 100 percent of the maximum price
election for one type, you must also choose 100 percent of the maximum
price election for all other types.
(b) The production guarantees per acre are progressive by stages and
increase at specified intervals to the final stage production guarantee.
The stages and production guarantees are as follows:
(1) For California:
------------------------------------------------------------------------
Percent of
stage 3
(final
Stage stage) Length of time
production
guarantee
------------------------------------------------------------------------
1......................... 50 From planting until first fruit
set.
2......................... 70 From first fruit set until
harvested.
3......................... 100 Harvested acreage.
------------------------------------------------------------------------
(2) For all other states, except California:
------------------------------------------------------------------------
Percent of
stage 4
(final
Stage stage) Length of time
production
guarantee
------------------------------------------------------------------------
1....... 50 From planting until qualifying
for stage 2.
2......................... 75 From the earlier of stakes
driven, one tie and pruning, or
30 days after planting until
qualifying for stage 3.
3......................... 90 From the earlier of the end of
stage 2 or 60 days after
planting until qualifying for
stage 4.
4......................... 100 From the earlier of 75 days
after planting or the beginning
of harvest.
------------------------------------------------------------------------
(c) Any acreage of tomatoes damaged to the extent that producers in
the area generally would not further care for the tomatoes will be
deemed to have been destroyed even though you continue to care for the
tomatoes. The production guarantee for such acreage will be the
guarantee for the stage in which such damage occurs.
(d) Any production guarantees for cherry, roma, or plum type
tomatoes will be specified in the Special Provisions.
4. Contract Changes
In accordance with section 4 (Contract Changes) of the Basic
Provisions (Sec. 457.8), the contract change date is September 30
preceding the cancellation date for counties with a January 15
cancellation date and December 31 preceding the cancellation date for
all other counties.
5. Cancellation and Termination Dates
In accordance with section 2 (Life of Policy, Cancellation, and
Termination) of the Basic Provisions (Sec. 457.8), the cancellation and
termination dates are:
Cancellation and Termination
------------------------------------------------------------------------
State Dates
------------------------------------------------------------------------
California, Florida, Georgia, and South January 15.
Carolina.
All other states....................... March 15.
------------------------------------------------------------------------
6. Report of Acreage
(a) In addition to the provisions of section 6 (Report of Acreage)
of the Basic Provisions (Sec. 457.8), you must report the row width.
(b) If spring and fall planting periods are allowed in the Special
Provisions you must report all the information required by section 6
(Report of Acreage) of the Basic Provisions (Sec. 457.8) and these Crop
Provisions by the acreage reporting date for each planting period.
7. Annual Premium
In lieu of provisions contained in the Basic Provisions (Sec.
457.8), for determining premium amounts, the annual premium is
determined by multiplying the final stage production guarantee by the
price election, by the premium rate, by the insured acreage, by your
share at the time coverage begins, and by any applicable premium
adjustment factor contained in the Special Provisions.
8. Insured Crop
In accordance with section 8 (Insured Crop) of the Basic Provisions
(Sec. 457.8), the crop insured will be all the tomatoes in the county
for which a premium rate is provided by the actuarial documents:
(a) In which you have a share;
(b) That are transplanted tomatoes that have been planted for
harvest as fresh market tomatoes;
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(c) That are planted within the spring or fall planting periods, as
applicable, specified in the Special Provisions;
(d) That, on or before the acreage reporting date, are subject to
any agreement in writing (packing contract) executed between you and a
packer, whereby the packer agrees to accept and pack the production
specified in the agreement, unless you control a packing facility or an
exception exists in the Special Provisions; and
(e) That are not (unless allowed by the Special Provisions):
(1) Grown for direct marketing;
(2) Interplanted with another crop;
(3) Planted into an established grass or legume; or
(4) Cherry, roma, or plum type tomatoes.
9. Insurable Acreage
(a) In addition to the provisions of section 9 (Insurable Acreage)
of the Basic Provisions (Sec. 457.8):
(1) Any acreage of the insured crop damaged before the final
planting date, to the extent that the majority of growers in the area
would normally not further care for the crop, must be replanted unless
we agree that it is not practical to replant. Unavailability of plants
will not be considered a valid reason for failure to replant.
(2) We do not insure any acreage of tomatoes:
(i) Grown by any person if the person had not previously:
(A) Grown fresh market tomatoes for commercial sales; or
(B) Participated in the management of a fresh market tomato farming
operation, in at least one of the three previous years.
(ii) That does not meet the rotation requirements contained in the
Special Provisions;
(iii) On which tomatoes, peppers, eggplants, or tobacco have been
grown within the previous two years unless the soil was fumigated or
nematicide was applied before planting the tomatoes, except that this
limitation does not apply to a first planting in Pennsylvania or if
otherwise specified in the Special Provisions; or
(b) In lieu of the provisions of section 9 (Insurable Acreage) of
the Basic Provisions (Sec. 457.8), that prohibit insurance from
attaching if a crop has not been planted and harvested in at least one
of the three previous calendar years, we will insure newly cleared land
or former pasture land planted to fresh market tomatoes.
10. Insurance Period
In lieu of the provisions of section 11 (Insurance Period) of the
Basic Provisions (Sec. 457.8):
(a) Coverage begins on each unit or part of a unit on the later of
the date you submit your application or when the tomatoes are planted.
(b) Coverage will end on any insured acreage at the earliest of:
(1) Total destruction of the tomatoes;
(2) Discontinuance of harvest;
(3) The date harvest should have started on any acreage that was not
harvested;
(4) 120 days after the date of transplanting or replanting;
(5) Completion of harvest;
(6) Final adjustment of a loss; or
(7) October 15 of the crop year in Delaware, Maryland, New Jersey,
North Carolina, and Virginia; October 31 of the crop year in California;
November 10 of the crop year in Florida, Georgia, and South Carolina;
and September 20 of the crop year in all other States.
11. Causes of Loss
(a) In accordance with the provisions of section 12 (Causes of Loss)
of the Basic Provisions (Sec. 457.8), insurance is provided only
against the following causes of loss that occur during the insurance
period:
(1) Adverse weather conditions;
(2) Fire;
(3) Insects, but not damage due to insufficient or improper
application of pest control measures;
(4) Plant disease, but not damage due to insufficient or improper
application of disease control measures;
(5) Wildlife;
(6) Earthquake;
(7) Volcanic eruption; or
(8) Failure of irrigation water supply, if caused by an insured
peril that occurs during the insurance period.
(b) In addition to the causes of loss excluded in section 12 (Causes
of Loss) of the Basic Provisions (Sec. 457.8), we will not insure
against damage or loss of production that occurs or becomes evident
after the tomatoes have been harvested.
12. Replanting Payment
(a) In accordance with section 13 (Replanting Payment) of the Basic
Provisions (Sec. 457.8), a replanting payment is allowed if the crop is
damaged by an insurable cause of loss and the acreage to be replanted
has sustained a loss in excess of 50 percent of the plant stand.
(b) The maximum amount of the replanting payment per acre will be:
(1) Seventy (70) cartons multiplied by your price election,
multiplied by your insured share for all insured tomatoes except cherry,
roma or plum types; and
(2) As specified in the Special Provisions for cherry, roma, or plum
types.
(c) In lieu of the provisions contained in section 13 (Replanting
Payment) of the Basic
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Provisions (Sec. 457.8) that permit only one replanting payment each
crop year, when both spring and fall planting periods are contained in
the Special Provisions, you may be eligible for one replanting payment
for acreage planted during each planting period within the crop year.
13. Settlement of Claim
(a) We will determine your loss on a unit basis. In the event you
are unable to provide separate, acceptable production records:
(1) For any optional units, we will combine all optional units for
which such production records were not provided; or
(2) For any basic units, we will allocate any commingled production
to such units in proportion to our liability on the harvested acreage
for the units.
(b) In the event of loss or damage covered by this policy, we will
settle your claim by:
(1) Multiplying the insured acreage for each type, if applicable, by
its respective production guarantee for the stage in which the damage
occurred;
(2) Multiplying the results of section 13(b)(1) by the respective
price election for each type, if applicable;
(3) Totaling the results of section 13(b)(2);
(4) Multiplying the total production to be counted of each type, if
applicable, (see section 13(c)) by the respective price election;
(5) Totaling the results of section 13(b)(4);
(6) Subtracting this result of section 13(b)(5) from the results in
section 13(b)(3); and
(7) Multiplying the result of section 13(b)(6) by your share.
(c) The total production to count (in cartons) from all insurable
acreage on the unit will include:
(1) All appraised production as follows:
(i) Not less than the production guarantee for acreage:
(A) That is abandoned;
(B) Put to another use without our consent;
(C) That is damaged solely by uninsured causes; or
(D) For which you fail to provide production records that are
acceptable to us;
(ii) Potential production lost due to uninsured causes;
(iii) Unharvested production of mature green and ripe tomatoes
remaining after harvest has ended:
(A) With a classification size of 6 x 7 (2\8/32\ inch minimum
diameter) or larger and that would grade eighty-five percent (85%) or
better U.S. No. 1 for types other than cherry, roma, or plum; or
(B) That grade in accordance with the requirements specified in the
Special Provisions for cherry, roma or plum types.
(iv) Potential production on unharvested acreage and potential
production on acreage when final harvest has not been completed;
(v) Potential production on insured acreage that you intend to put
to another use or abandon, if you and we agree on the appraised amount
of production. Upon such agreement, the insurance period for that
acreage will end when you put the acreage to another use or abandon the
crop. If agreement on the appraised amount of production is not reached:
(A) If you do not elect to continue to care for the crop, we may
give you consent to put the acreage to another use if you agree to leave
intact, and provide sufficient care for representative samples of the
crop in locations acceptable to us (The amount of production to count
for such acreage will be based on the harvested production or appraisals
from the samples at the time harvest should have occurred. If you do not
leave the required samples intact, or you fail to provide sufficient
care for the samples, our appraisal made prior to giving you consent to
put the acreage to another use will be used to determine the amount of
production to count); or
(B) If you elect to continue to care for the crop, the amount of
production to count for the acreage will be the harvested production, or
our reappraisal if additional damage occurs and the crop is not
harvested; and
(2) All harvested production from the insurable acreage:
(i) That is marketed, regardless of grade; and
(ii) That is unmarketed and:
(A) That grades eighty-five percent (85%) or better U.S. No. 1 with
a classification size of 6x7 (2-8/32 inch minimum diameter) or larger
for all types except cherry, roma, or plum; or
(B) That grade in accordance with the requirements specified in the
Special Provisions for cherry, roma, or plum types.
(d) Only that amount of appraised production that exceeds the
difference between the final stage guarantee and the stage guarantee
applicable to the acreage will be production to count.
14. Late and Prevented Planting
The late and prevented planting provisions of the Basic Provisions
are not applicable.
[62 FR 23631, May 1, 1997; 62 FR 33539, June 20, 1997, as amended at 62
FR 65171, Dec. 10, 1997; 63 FR 36157, July 2, 1998; 63 FR 50753, Sept.
23, 1998]
Sec. 457.129 Fresh market sweet corn crop insurance provisions.
The fresh market sweet corn crop insurance provisions for the 1999
and succeeding crop years are as follows:
FCIC Policies
[[Page 213]]
Department of Agriculture
Federal Crop Insurance Corporation
Reinsured Policies
(Appropriate title for insurance provider)
Both FCIC and Reinsured Policies
Fresh Market Sweet Corn Crop Provisions
If a conflict exists among the policy provisions, the order of
priority is as follows: (1) The Catastrophic Risk Protection
Endorsement, if applicable; (2) the Special Provisions; (3) these Crop
Provisions; and (4) the Basic Provisions with (1) controlling (2), etc.
1. Definitions
Container--The unit for measurement of the insured crop as specified
in the Special Provisions.
Crop year--In lieu of the definition of ``crop year'' contained in
section 1 (Definitions) of the Basic Provisions (Sec. 457.8), crop year
is a period of time that begins on the first day of the earliest
planting period for fall planted sweet corn and continues through the
last day of the insurance period for spring planted sweet corn. The crop
year is designated by the calendar year in which spring planted sweet
corn is harvested.
Direct marketing--Sale of the insured crop directly to consumers
without the intervention of an intermediary such as a wholesaler,
retailer, packer, processor, shipper or buyer. Examples of direct
marketing include selling through an on-farm or roadside stand, farmer's
market, and permitting the general public to enter the field for the
purpose of picking all or a portion of the crop.
Excess rain--An amount of precipitation sufficient to directly
damage the crop.
Excess wind--Wind speed strong enough to prevent adequate
pollination or cause lodging of stalks and prevent a normal harvest.
Freeze--The formation of ice in the cells of the plant or its fruit,
caused by low air temperatures.
Harvest--The picking of sweet corn on the unit.
Marketable sweet corn--Sweet corn that meets the standards for
grading U.S. No. 1 or better and will withstand normal handling and
shipping.
Plant stand--The number of live plants per acre prior to the
occurrence of an insurable cause of loss.
Planted acreage--In addition to the definition contained in the
Basic Provisions, for each planting period, sweet corn seed must be
planted in rows far enough apart to permit mechanical cultivation,
unless otherwise provided by the Special Provisions, actuarial
documents, or by written agreement.
Planting period--The period of time designated in the actuarial
documents in which fresh market sweet corn must be planted to be
considered fall, winter, or spring-planted sweet corn.
Potential production--The number of containers of sweet corn that
the sweet corn plants will or would have produced per acre by the end of
the insurance period, assuming normal growing conditions and practices.
Practical to replant--In lieu of the definition of ``Practical to
replant'' contained in section 1 of the Basic Provisions (Sec. 457.8),
practical to replant is defined as our determination, after loss or
damage to the insured crop, based on factors, including but not limited
to moisture availability, condition of the field, marketing windows, and
time to crop maturity, that replanting to the insured crop will allow
the crop to attain maturity prior to the calendar date for the end of
the insurance period (inability to obtain seed will not be considered
when determining if it is practical to replant).
Sweet corn--A type of corn with kernels containing a high percentage
of sugar that is adapted for human consumption as a vegetable.
2. Unit Division
(a) A basic unit, as defined in section 1 of the Basic Provisions,
will also be divided into additional basic units by planting period.
(b) Provisions in the Basic Provisions that allow optional units by
irrigated and non-irrigated practices are not applicable.
3. Amounts of Insurance and Production Stages
(a) In addition to the requirements of section 3 (Insurance
Guarantees, Coverage Levels, and Prices for Determining Indemnities) of
the Basic Provisions (Sec. 457.8), you may select only one coverage
level (and the corresponding amount of insurance designated in the
actuarial documents for the applicable planting period and practice) for
all the sweet corn in the county insured under this policy.
(b) The amount of insurance you choose for each planting period and
practice must have the same percentage relationship to the maximum price
offered by us for each planting period and practice. For example, if you
choose 100 percent of the maximum amount of insurance for a specific
planting period and practice, you must also choose 100 percent of the
maximum amount of insurance for all other planting periods and
practices.
(c) The production reporting requirements contained in section 3
(Insurance Guarantees, Coverage Levels, and Prices for Determining
Indemnities) of the Basic Provisions (Sec. 457.8), do not apply to
fresh market sweet corn.
(d) The amounts of insurance are progressive by stages as follows:
[[Page 214]]
------------------------------------------------------------------------
Percent of
the amount
of
Stage insurance Length of time
per acre
that you
selected
------------------------------------------------------------------------
1.................. 65 From planting through the beginning
of tasseling (which is when the
tassel becomes visible above the
whorl).
Final............... 100 From tasseling until the acreage is
harvested.
------------------------------------------------------------------------
(e) Any acreage of sweet corn damaged in the first stage to the
extent that the majority of producers in the area would not normally
further care for it, will be deemed to have been destroyed. The
indemnity payable for such acreage will be based on the stage the plants
had achieved when the damage occurred.
4. Contract Changes
In accordance with section 4 (Contract Changes) of the Basic
Provisions (Sec. 457.8), the contract change date shown below is the
date preceding the cancellation date:
------------------------------------------------------------------------
State and county Date
------------------------------------------------------------------------
All Florida counties; and all Georgia April 30.
counties for which the Special
Provisions designate a fall planting
period.
All Georgia counties for which the November 30.
Special Provisions do not designate a
fall planting period; and all other
States.
------------------------------------------------------------------------
5. Cancellation and Termination dates
In accordance with section 2 (Life of Policy, Cancellation, and
Termination) of the Basic Provisions (Sec. 457.8), the cancellation and
termination dates are:
------------------------------------------------------------------------
Cancellation and termination
State and county Dates
------------------------------------------------------------------------
Florida; Atkinson, Baker, Berrien, July 31.
Brantley, Camden, Colquitt, Cook,
Early, Mitchell, and Ware Counties
Georgia and all counties south thereof
for which the Special Provisions
designate a fall planting period.
Alabama; South Carolina; and all Georgia February 15.
Counties for which the Special
Provisions do not designate a fall
planting period.
All other States........................ March 15.
------------------------------------------------------------------------
6. Report of Acreage
In addition to the requirements of section 6 (Report of Acreage) of
the Basic Provisions (Sec. 457.8), you must report on or before the
acreage reporting date contained in the Special Provisions for each
planting period, all the acreage of sweet corn in the county insured
under this policy in which you have a share.
7. Annual Premium
In lieu of the premium amount determinations contained in section 7
(Annual Premium) of the Basic Provisions (Sec. 457.8), the annual
premium amount for each cultural practice (e.g., fall-planted irrigated)
is determined by multiplying the final stage amount of insurance per
acre by the premium rate for the cultural practice as established in the
Actuarial Table, by the insured acreage, by your share at the time
coverage begins, and by any applicable premium adjustment factors
contained in the actuarial documents.
8. Insured Crop
In accordance with section 8 (Insured Crop) of the Basic Provisions
(Sec. 457.8), the crop insured will be all the sweet corn in the county
for which a premium rate is provided by the actuarial documents:
(a) In which you have a share;
(b) That is:
(1) Planted to be harvested and sold as fresh market sweet corn;
(2) Planted within the planting periods designated in the actuarial
documents;
(3) Grown under an irrigated practice, unless otherwise provided in
the Special Provisions;
(4) Grown by a person who in at least one of the three previous crop
years:
(i) Grew sweet corn for commercial sale; or
(ii) Participated in managing a sweet corn farming operation;
(c) That is not:
(1) Interplanted with another crop;
(2) Planted into an established grass or legume; or
(3) Grown for direct marketing.
9. Insurable Acreage
(a) In lieu of the provisions of section 9 (Insurable Acreage) of
the Basic Provisions (Sec. 457.8), that prohibit insurance attaching if
a crop has not been planted in at least one of the three previous crop
years, we will insure newly cleared land or former pasture land planted
to fresh market sweet corn.
(b) In addition to the provisions of section 9 (Insurable Acreage)
of the Basic Provisions (Sec. 457.8):
(1) You must replant any acreage of sweet corn damaged during the
planting period in which initial planting took place whenever
[[Page 215]]
less than 75 percent of the plant stand remains: and
(i) It is practical to replant: and
(ii) If, at the time the crop was damaged, the final day of the
planting period has not passed.
(2) Whenever sweet corn initially is planted during the fall or
winter planting periods and the condition specified in section
9(b)(1)(ii) is not satisfied, you may elect:
(i) To replant such acreage and collect any replant payment due as
specified in section 12. The initial planting period coverage will
continue for such replanted acreage.
(ii) Not to replant such acreage and receive an indemnity based on
the stage of growth the plants had attained at the time of damage.
However, such an election will result in the acreage being uninsurable
in the subsequent planting period.
10. Insurance Period
In lieu of the provisions of section 11 (Insurance Period) of the
Basic Provisions (Sec. 457.8), coverage begins on each unit or part of
a unit the later of the date we accept your application, or when the
sweet corn is planted in each planting period. Coverage ends at the
earliest of:
(a) Total destruction of the sweet corn on the unit;
(b) Abandonment of the sweet corn on the unit;
(c) The date harvest should have started on the unit on any acreage
which will not be harvested;
(d) Final adjustment of a loss on the unit;
(e) Final harvest; or
(f) 100 days after the date of planting or replanting.
11. Causes of Loss
(a) In accordance with the provisions of section 12 (Causes of Loss)
of the Basic Provisions (Sec. 457.8), insurance is provided only
against the following causes of loss that occur during the insurance
period:
(1) Excess rain;
(2) Excess wind;
(3) Fire;
(4) Freeze;
(5) Hail;
(6) Tornado; or
(7) Failure of the irrigation water supply, if caused by an insured
cause of loss that occurs during the insurance period.
(b) In addition to the causes of loss excluded in section 12 (Causes
of Loss) of the Basic Provisions (Sec. 457.8), we will not insure
against any loss of production due to:
(1) Disease or insect infestation, unless no effective control
measure exists for such disease or insect infestation; or
(2) Failure to market the sweet corn, unless such failure is due to
actual physical damage caused by an insured cause of loss that occurs
during the insurance period.
12. Replanting Payments
(a) In accordance with section 13 (Replanting Payment) of the Basic
Provisions (Sec. 457.8), a replanting payment is allowed if, due to an
insured cause of loss, more than 25 percent of the plant stand will not
produce sweet corn and it is practical to replant.
(b) The maximum amount of the replanting payment per acre will be
the lesser of your actual cost of replanting or the result obtained by
multiplying the per acre replanting payment amount contained in the
Special Provisions by your insured share.
(c) In lieu of the provisions contained in section 13 (Replanting
Payment) of the Basic Provisions (Sec. 457.8), limiting a replanting
payment to one each crop year, only one replanting payment will be made
for acreage planted during each planting period within the crop year.
13. Duties in the Event of Damage or Loss
In addition to the requirements contained in section 14 (Duties in
the Event of Damage or Loss) of the Basic Provisions (Sec. 457.8), if
you intend to claim an indemnity on any unit you also must give us
notice not later than 72 hours after the earliest of:
(a) The time you discontinue harvest of any acreage on the unit;
(b) The date harvest normally would start if any acreage on the unit
will not be harvested; or
(c) The calendar date for the end of the insurance period.
14. Settlement of Claim
(a) We will determine your loss on a unit basis. In the event you
are unable to provide separate acceptable production records:
(1) For any optional unit, we will combine all optional units for
which such production records were not provided; or
(2) For any basic unit, we will allocate any commingled production
to such units in proportion to our liability on the harvested acreage
for each unit.
(b) In the event of loss or damage covered by this policy, we will
settle your claim by:
(1) Multiplying the insured acreage in each stage by the amount of
insurance per acre for the final stage;
(2) Multiplying each result in section 14(b)(1) by the percentage
for the applicable stage (see section 3(d));
(3) Total the results of section 14(b)(2);
(4) Subtracting either of the following values from the result of
section 14(b)(3):
(i) For other than catastrophic risk protection coverage, the total
value of production to be counted (see section 14(c)); or
(ii) For catastrophic risk protection coverage, the result of
multiplying the total
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value of production to be counted (see section 14(c)) times:
(A) Sixty percent for the 1998 crop year; or
(B) Fifty-five percent for 1999 and subsequent crop years; and
(5) Multiplying the result of section 14(b)(4) by your share.
(c) The total value of production to count from all insurable
acreage on the unit will include:
(1) Not less than the amount of insurance per acre for the stage for
any acreage:
(i) That is abandoned;
(ii) Put to another use without our consent;
(iii) That is damaged solely by uninsured causes; or
(iv) For which you fail to provide acceptable production records;
(2) The value of the following appraised production will not be less
than the dollar amount obtained by multiplying the number of containers
of appraised sweet corn times the minimum value per container shown in
the Special Provisions for the planting period:
(i) Unharvested production (unharvested production that is damaged
or defective due to insurable causes and is not marketable will not be
counted as production to count);
(ii) Production lost due to uninsured causes; and
(iii) Potential production on insured acreage that you intend to put
to another use or abandon, if you and we agree on the appraised amount
of production. Upon such agreement, the insurance period for that
acreage will end when you put the acreage to another use or abandon the
crop. If agreement on the appraised amount of production is not reached:
(A) We may require you to continue to care for the crop so that a
subsequent appraisal may be made or the crop harvested to determine
actual production (If we require you to continue to care for the crop
and you do not do so, the original appraisal will be used); or
(B) You may elect to continue to care for the crop, in which case
the amount of production to count for the acreage will be the harvested
production, or our reappraisal if the crop is not harvested.
(3) The total value of all harvested production from the insurable
acreage will be the dollar amount obtained by subtracting the allowable
cost contained in the Special Provisions from the price received for
each container of sweet corn (this result may not be less than the
minimum value shown in the Special Provisions for any container of sweet
corn), and multiplying this result by the number of containers of sweet
corn harvested. Harvested mature sweet corn that is damaged or defective
due to insurable causes and is not marketable, will not be counted as
production to count.
15. Late and Prevented Planting
The late and prevented planting provisions of the Basic Provisions
are not applicable.
16. Minimum Value Option
(a) The provisions of this option are continuous and will be
attached to and made a part of your insurance policy, if:
(1) You elect the Minimum Value Option on your application, or on a
form approved by us, on or before the sales closing date for the initial
crop year in which you wish to insure fresh market sweet corn under this
option, and pay the additional premium indicated in the actuarial
documents for this optional coverage; and
(2) You have not elected coverage under the Catastrophic Risk
Protection Endorsement.
(b) In lieu of the provisions contained in section 14(c)(3), the
total value of harvested production will be determined as follows:
(1) For sold production, the dollar amount obtained by subtracting
the allowable cost contained in the Special Provisions from the price
received for each container of sweet corn (this result may not be less
than zero for any container of sweet corn), and multiplying this result
by the number of containers of sweet corn sold; and
(2) For marketable production that is not sold, the dollar amount
obtained by multiplying the number of containers of such sweet corn on
the unit by the minimum value shown in the Special Provisions for the
planting period (harvested production that is damaged or defective due
to insurable causes and is not marketable will not be counted as
production).
(c) This option may be canceled by either you or us for any
succeeding crop year by giving written notice on or before the
cancellation date preceding the crop year for which the cancellation of
this option is to be effective.
[62 FR 14783, Mar. 28, 1997; 62 FR 26205, May 13, 1997, as amended at 62
FR 65171, Dec. 10, 1997]
Sec. 457.130 Macadamia tree crop insurance provisions.
The macadamia tree crop insurance provisions for the 1999 and
succeeding crop years are as follows:
FCIC Policies
Department of Agriculture
Federal Crop Insurance Corporation
Reinsured Policies
(Appropriate title for insurance provider).
Both FCIC and reinsured policies:
[[Page 217]]
Macadamia Tree Crop Provisions
If a conflict exists among the policy provisions, the order of
priority is as follows: (1) The Catastrophic Risk Protection
Endorsement, if applicable; (2) the Special Provisions; (3) these Crop
Provisions; and (4) the Basic Provisions with (1) controlling (2), etc.
1. Definitions
Age. The number of complete 12-month periods that have elapsed since
the month the trees were set out or were grafted, whichever is later.
Age determination will be made for each unit, or portion thereof, as of
January 1 of each crop year.
Crop year. A period beginning with the date insurance attaches to
the macadamia tree crop extending through December 31 of the same
calendar year. The crop year is designated by the calendar year in which
insurance attaches.
Destroyed. Trees damaged to the extent that we determine
replacement, including grafts, is required.
Good farming practices. The cultural practices generally in use in
the county for the crop to have normal growth and vigor, and are those
recognized by the Cooperative State Research, Education, and Extension
Service as compatible with agronomic and weather conditions in the area.
Graft. The uniting of a macadamia shoot to an established macadamia
tree rootstock for future production of macadamia nuts.
Interplanted. Acreage on which two or more crops are planted in any
form of alternating or mixed pattern.
Irrigated practice. A method by which the normal growth and vigor of
the insured trees is maintained by artificially applying adequate
quantities of water during the growing season by appropriate systems and
at the proper times.
Rootstock. The root and stem portion of a macadamia tree to which a
macadamia shoot can be grafted.
2. Unit Division
(a) Sections 34(a) (1), (3), and (4) of the Basic Provisions are not
applicable.
(b) Provisions in the Basic Provisions that allow optional units by
section, section equivalent, or FSA farm serial number and by irrigated
and non-irrigated practices are not applicable. Unless otherwise allowed
by written agreement, optional units may be established only if each
optional unit:
(1) Contains at least 80 acres of insurable age macadamia trees; or
(2) Is located on non-contiguous land.
(c) You must have provided records, which can be independently
verified, of acreage and age of trees for each unit for at least the
last crop year.
3. Insurance Guarantees, Coverage Levels, and Dollar Amounts for
Determining Indemnities
(a) In addition to the requirements of section 3 (Insurance
Guarantees, Coverage Levels, and Prices for Determining Indemnities) of
the Basic Provisions (Sec. 457.8):
(1) You may select only one dollar amount of insurance for all the
macadamia trees in the county in each age group contained in the
actuarial table that are insured under this policy. The dollar amount of
insurance you choose for each age group must have the same percentage
relationship to the maximum dollar amount offered by us for each age
group. For example, if you choose 100 percent of the maximum dollar
amount of insurance for one age group, you must also choose 100 percent
of the maximum dollar amount of insurance for all other age groups.
(2) If the stand is less than 90 percent, based on the original
planting pattern, the dollar amount of insurance will be reduced 1
percent for each percent below 90 percent. For example, if the dollar
amount of insurance you selected is $2,000 and the stand is 85 percent
of the original stand, the dollar amount of insurance on which any
indemnity will be based is $1,900 ($2,000 multiplied by 0.95).
(3) You must report, by the sales closing date contained in the
Special Provisions, by type if applicable:
(i) Any damage, removal of trees, change in practices, or any other
circumstance that may reduce the dollar amount of insurance and the
number of affected acres;
(ii) The number of trees on insurable and uninsurable acreage;
(iii) The month and year on which the trees were set out or grafted
and the planting pattern;
(iv) For the first year of insurance following replacement, the
month and year of replacement if more than 10 percent of the trees on
any unit have been replaced in the previous five crop years; and
(v) For the first year of insurance for acreage interplanted with
another perennial crop, and any time the planting pattern of such
acreage is changed:
(A) The age of the interplanted crop, and type if applicable;
(B) The planting pattern; and
(C) Any other information that we request in order to establish your
dollar amount of insurance.
We will reduce the dollar amount of insurance as necessary, based on
our estimate of the effect of interplanted perennial crop, removal of
trees, damage, change in practices, and any other circumstance that
adversely affects the insured crop. If you fail to notify us of any
circumstance that may reduce your dollar amount of insurance from
previous levels, we will reduce your dollar
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amount of insurance as necessary at any time we become aware of the
circumstance.
(b) The production reporting requirements contained in section 3
(Insurance Guarantees, Coverage Levels, and Prices for Determining
Indemnities) of the Basic Provisions (Sec. 457.8), do not apply to
macadamia trees.
4. Contract Changes
In accordance with section 4 (Contract Changes) of the Basic
Provisions (Sec. 457.8), the contract change date is August 31
preceding the cancellation date.
5. Cancellation and Termination Dates
In accordance with section 2 (Life of Policy, Cancellation, and
Termination) of the Basic Provisions (Sec. 457.8), the cancellation and
termination dates are December 31.
6. Insured Crop
In accordance with section 8 (Insured Crop) of the Basic Provisions
(Sec. 457.8), the crop insured will be all macadamia trees in the
county for which a premium rate is provided by the actuarial table:
(a) In which you have a share;
(b) That are grown for the production of macadamia nuts;
(c) For which the rootstock is adapted to the area;
(d) That are at least one year of age when the insurance period
begins; and
(e) That, if the orchard is inspected, is considered acceptable by
us.
7. Insurable Acreage
In lieu of the provisions in section 9 (Insurable Acreage) of the
Basic Provisions (Sec. 457.8), that prohibit insurance attaching to a
crop planted with another crop, macadamia trees interplanted with
another perennial crop are insurable unless we inspect the acreage and
determine that it does not meet the requirements contained in your
policy.
8. Insurance Period
(a) In accordance with the provisions of section 11 (Insurance
Period) of the Basic Provisions (Sec. 457.8):
(1) Coverage begins on January 1 of each crop year, except that for
the year of application, if your application is received after December
22 but prior to January 1, insurance will attach on the 10th day after
your properly completed application is received in our local office,
unless we inspect the acreage during the 10-day period and determine
that it does not meet insurability requirements. Y